1. Home
  2. Investors
  3. Results and reporting
  4. Annual report
  5. bp strategy 2017-2020

bp strategy 2017-2020

bp announced a new strategy on 4 August 2020

We have established a track record of operational and financial delivery.

 

This has helped to create a strong foundation for us to advance our low carbon agenda as we work to achieve our ambition to become a net zero company by 2050 or sooner and to help the world get to net zero.

 

Our strategy, which we set out in 2017, allows us to be competitive, flexible and resilient while also responding to a rapidly changing energy landscape, with growing expectations for us to adapt to changing demands from stakeholders.

 

We remain committed to managing our portfolio for value, and investing with discipline in flexible and resilient options, which together support our pursuit of a strategy which we believe is consistent with the goals of the Paris Agreement.

 

Following bp’s new ambition and aims set out in February 2020, we plan to announce more information on how we intend to reimagine energy and reinvent bp, while performing as we transform, at a capital markets day in September 2020.

Growing advantaged oil and gas in the Upstream

 

What this strategic priority means

We aim to invest in oil and gas, producing both with increasing efficiency. This means lower cost, higher margin and close to markets, with a focus on carbon.

Almost half of bp’s upstream portfolio is natural gas, and several more gas projects are planned to come onstream in the next  few years.

As the world moves towards net zero emissions, we think natural gas can play an important role in getting us there. When burned for power, natural gas has, on average on a lifecycle basis, about half the GHG emissions of coal, with fewer air pollutants,  so expanding its use globally to displace coal will help to reduce carbon emissions. In fact, switching from coal to gas has avoided more than 500 million tonnes of CO2 from the power sector globally since 2010.

 

Progress in 2019

We’ve started up 24 of the 35 planned major projects since 2016 and are on track to deliver 900,000 barrels of oil equivalent per day of new major project production by the end of 2021.

  •  Sanctioned $6 billion Azeri Central East development with partners.
  • Agreed to sell our Alaska assets to Hilcorp.
  • Sanctioned the third project in block KG D6, offshore India with our partner Reliance.  

5

major project start ups

$100m

fund for projects that will help reduce greenhouse gas emissions

Market-led growth in the Downstream

What this strategic priority means

We aim to innovate with advanced products and strategic partnerships, building competitively advantaged businesses that deliver profitable marketing growth.

 

We aim to invest in higher-returning fuels marketing and lubricants businesses with growth potential and reliable cash flows. And we are continuing to expand into fast-growing emerging markets.  

 

We are also delivering and developing new products, offers and business models that support the transition to a lower carbon and digitally enabled future over the longer term.

 

Progress in 2019

We have continued to make strategic progress in fuels marketing, with our convenience partnership model now in around 1,600 sites across the network.

  • Agreed to expand our partnership with Reliance Industries Ltd to include a retail service station network and aviation fuels business across India.
  • Continued to expand in other material markets – most notably in Mexico where we now have more than 520 bp-branded retail sites. We also continued to grow our network in Indonesia and expanded our China network into Shandong and Hebei provinces through our joint venture with Dongming.
  • Announced the development of BP Infinia, an enhanced recycling technology, capable of processing currently unrecyclable PET plastic waste.  

>1200

retail sites in new markets of China, Mexico and Indonesia

~1600

convenience partnership sites

Venturing and low carbon across multiple fronts

What this strategic priority means

We aim to pursue new opportunities to meet evolving technology, consumer and policy trends. 

 

We are building up our renewable energy portfolio – with activities spanning renewable fuels and products, wind and solar energy and biopower. We work across multiple fronts through our investments in low carbon activities with joint ventures, collaborations and new business models. Through bp ventures we have invested more than $650 million in around 40 companies since it was set up in 2007. Our investments support technologies and innovations that we believe could benefit bp and global energy systems.

 

Progress in 2019

We increased our stake in Lightsource bp to create a 50:50 joint venture and expanded our biofuels business in Brazil by more than 50%, through a joint venture with Bunge to create BP Bunge Bioenergia. We also made a number of other investments spanning a range of strategic focus areas.

  • Started bp Launchpad, our scale-up factory, designed to help quickly grow disruptive technologies and business models which could become future bp business units.
  • Expanded our digital energy portfolio by investing in Grid Edge, which has developed an artificial intelligence-based energy management platform that helps customers predict, control and optimize their buildings’ energy profile.
  • Invested $5 million in Belmont Technology to further strengthen bp’s artificial intelligence and digital capabilities.

 

50%

increase in biofuels business in Brazil, through BP Bunge Bioenergia

7

new investments through BP Ventures in 2019

Modernizing the whole group

What this strategic priority means

We aim to simplify our processes and enhance our productivity through digital solutions.

 

We achieve this through three pillars:

  • Agility – improving and simplifying the way we operate.
  • Mindset change – accepting the reality and adopting the right attitude for a business that is increasingly competitive and margin-dependent.
  • Digital transformation – digitizing and automating our work.

Progress in 2019

We’ve introduced a range of technologies and improved ways of working across bp to support our modernization priority. Our mentors and coaches deliver a programme of training for employees to share agile practices and support changing mindsets, which are key to generating ideas to improve how we work across the whole business.

  • Launched ‘Connected BP’ in partnership with data technology pioneer Palantir. The programme connects different systems and business areas into one platform where users can connect, transform and share data.
  • Developed a holistic process for leak detection and intervention using infrared cameras, lasers and drone technology at our US onshore BPX Energy operations.
  • Performed a concept trial of Spot, a robot from Boston Dynamics, at our US Whiting refinery. Spot can gather data, detect abnormalities and perform tasks, such as detecting gas emissions and helping remove people from hazardous spaces.  

1000

transformation projects running in the Upstream.

~1.5bn

invested every year in maintaining BP’s infrastructure.