Release date: 12 February 2020
1. Net zero across BP’s operations on an absolute basis by 2050 or sooner.
2. Net zero on carbon in BP’s oil and gas production on an absolute basis by 2050 or sooner.
3. 50% cut in the carbon intensity of products BP sells by 2050 or sooner.
4. Install methane measurement at all BP’s major oil and gas processing sites by 2023 and reduce methane intensity of operations by 50%.
5. Increase the proportion of investment into non-oil and gas businesses over time.
6. More active advocacy for policies that support net zero, including carbon pricing.
7. Further incentivise BP’s workforce to deliver aims and mobilise them to advocate for net zero.
8. Set new expectations for relationships with trade associations.
9. Aim to be recognised as a leader for transparency of reporting, including supporting the recommendations of the TCFD.
10. Launch a new team to help countries, cities and large companies decarbonise.
Production & Operations; Customers & Products; Gas & Low Carbon Energy; and Innovation & Engineering.
Sustainability & Strategy; Regions, Cities & Solutions; and Trading & Shipping.
Finance; Legal; People & Culture; and Communications & Advocacy.
No change to BP’s fundamental commitments:
BP’s new CEO Bernard Looney today announces a new purpose and a new ambition for the company.
BP’s new purpose is reimagining energy for people and our planet.
The purpose is underpinned by an industry-leading ambition – for BP to become a net zero company by 2050 or sooner, and to help the world get to net zero – and this ambition is supported by ten aims.
To deliver all this, BP will fundamentally transform its whole organisation, and maintain its commitment to performing while transforming.
Bernard Looney said:
“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero. We all want energy that is reliable and affordable, but that is no longer enough. It must also be cleaner. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it.
“This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change – this is the right thing for the world and for BP.”
Helge Lund, BP’s chairman, commented:
“Energy markets are changing, driven by climate change, technology and societal expectations, and the Board supports Bernard and his new leadership team´s ambition for BP. Aiming for net zero is not only the right thing for BP, it is the right thing for our shareholders and for society more broadly. As we embark on this ambitious agenda, we will maintain a strong focus on safe, reliable and efficient operations and on delivering the promises we have made to our investors.”
BP’s new ambition to be a net zero company by 2050 or sooner covers the greenhouse gas emissions from its operations worldwide, currently around 55 million tonnes of CO2 equivalent (MteCO2e) a year, and the carbon in the oil and gas that it produces, equivalent currently to around 360 MteCO2e emissions a year – both on an absolute basis. Taken together, delivery of these aims would equate to a reduction in emissions to net zero from what is currently around 415 MteCO2e a year.
“This is what we mean by making BP net zero. It directly addresses all the carbon we get out of the ground as well as all the greenhouse gases we emit from our operations. These will be absolute reductions, which is what the world needs. If this were to happen to every barrel of oil and gas produced, the emissions problem for our sector would be solved. But of course, the world is not that simple; the whole energy system has to be transformed and everyone has a contribution to make – producers and sellers of energy, policy makers and everyone who uses energy.” - Bernard Looney
Therefore, BP also aims to help its customers reduce their emissions by halving the carbon intensity of the products it sells, again by 2050 or sooner – offering customers more and better choices of low- and no-carbon products.
BP also aims to install methane measurement at all of its existing major oil and gas processing sites by 2023 and then reduce the methane intensity of its operations by 50%.
And over time BP also aims to increase the proportion of investment it makes into non-oil and gas businesses:
“We expect to invest more in low carbon businesses – and less in oil and gas – over time. The goal is to invest wisely, into businesses where we can add value, develop at scale, and deliver competitive returns.” - Bernard Looney.
The ambition also includes a series of aims targeted at supporting the world’s progress towards net zero:
The structure of BP’s organisation – and of much of the industry – has been broadly the same for more than a century, split into separate organisations – upstream, downstream, and other businesses. To deliver its new ambition and aims, BP will now undergo a fundamental reorganisation.
“We need to reinvent BP. Our historic structure has served us well but, in order to keep up with rapidly-evolving customer demands and society’s expectations, we need to become more integrated and more focused. So we are undertaking a major reorganisation, introducing a new structure, a new leadership team and new ways of working for all of us.” - Bernard Looney
Under the plans, BP’s existing, largely autonomous business segments – upstream and downstream – will be dismantled and the group reorganised globally into a more focused and more integrated entity, comprising 11 teams. The heads of these teams will make up BP’s new leadership team.
Performance and value growth will be delivered by four business groups:
Three integrators will be established to find and maximise opportunities for BP:
Four teams will serve as enablers of business delivery:
Over the next few months, the new BP leadership team will focus on building their teams and on developing BP’s strategy to deliver the ambition.
“Together we will aim to build a more agile, innovative and efficient BP. A purpose-driven, digitally-enabled, fully-integrated organisation. I’m confident that this new leadership team, together with all our people, have the skill and will to turn BP into a thriving sustainable energy business that is a force for good in a net zero world.” - Bernard Looney
Despite the planned group-wide programme of change, BP’s fundamental commitments remain unchanged – to safety and to investors.
“BP needs to continue to perform as we transform. As committed as I am to making transformation happen, I am equally committed to some fundamental principles that have served us well. Safe and reliable operations will always underpin all we do, and we remain committed to meeting the promises we have made to our shareholders. We can only reimagine energy if we are financially strong, able to pay the dividend our owners depend on and to generate the cash to invest in new low and no-carbon businesses.” - Bernard Looney
BP’s commitment to safe and reliable operations is unchanged with safety as a core value. The new structure is expected to underpin and strengthen safety performance.
BP also remains committed to its investor proposition of growing sustainable free cash flow and distributions to shareholders over the long term. It continues to be committed to a strong financial frame including deleveraging the balance sheet and maintaining capital discipline, to delivering its free cash flow targets for 2021, and to staying focused on costs and pursuing efficiencies.
BP intends to host a capital markets day in September at which the leadership team will set out more information on BP’s strategy and near-term plans.
BP press office, London: +44 (0)20 7496 4076, email@example.com
In order to utilise the ‘safe harbor’ provisions of the United States Private Securities Litigation Reform Act of 1995 (the ‘PSLRA’) and the general doctrine of cautionary statements, BP is providing the following cautionary statement: The discussion in this announcement contains certain aims, ambitions, targets and other forward-looking statements – that is, statements related to future, not past events and circumstances – with respect to BP’s new purpose, ambition and structure.These statements may generally, but not always, be identified by the use of words such as ‘will’, ‘expects’, ‘is expected to’, ‘aims’, ‘should’, ‘may’, ‘objective’, ‘ambitions’, ‘is likely to’, ‘intends’, ‘believes’, ‘anticipates’, ‘plans’, ‘we see’, ‘is committed to’ or similar expressions. In particular, the following, among other statements, are all forward-looking statements: BP’s new ambition to be a net zero company by 2050 or sooner including its aims regarding emissions across operations, the carbon content of its oil and gas production; a 50% cut in the carbon intensity of products BP sells, methane measurement at major oil and gas processing sites by 2023 and subsequent reduction of methane intensity of operations, and aims to increase the proportion of investment into non-oil and gas businesses over time; aims to help the world get to net zero; plans for incentivising BP’s global workforce; plans for a wide-ranging restructuring of the business; the aim to build a more agile, innovative and efficient BP; continuing commitment to safe and reliable operations; commitment to continuing to perform as BP transforms; continuing commitment to the investor proposition including with respect to growing free cash flow and distributions to shareholders over long term, deleveraging the balance sheet, capital discipline, delivering 2021 free cash flow targets and focus on costs and pursuing efficiencies; and commitment to transparency and advocacy for a low carbon world.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the future and are outside the control of BP. Actual results may differ materially from those expressed in such statements, depending on a variety of factors, including: the specific factors identified in the discussions accompanying such forward-looking statements; societal shifts in consumer demand; delays to the pace of change; development and use of new technology; timing of bringing new projects on stream; ability to exploit growth or investment opportunities; changes in public expectations and other changes to business conditions; adverse changes in tax regimes; the timing, quantum and nature of certain acquisitions and divestments; future levels of industry product supply, demand and pricing; price and availability of alternative fuels; operational and safety problems; delays in developing infrastructure for transportation and distribution; economic and financial market conditions generally or in various countries and regions; political and social stability and economic growth in relevant areas of the world; political and economic policies in jurisdictions where we operate; changes in laws and governmental regulations; regulatory or legal actions and the actions of courts; delays in the processes for resolving claims; recruitment and retention of a skilled workforce; labour relations and industrial actions by workers; the success of partnering; the actions of competitors, trading partners, contractors, subcontractors, creditors, rating agencies and others; our access to future financial resources; business disruption and crisis management; the impact on our reputation of ethical misconduct and non-compliance with regulatory obligations; natural disasters and adverse weather conditions; wars and acts of terrorism; cyber-attacks or sabotage; and other factors discussed elsewhere in this announcement, and under “Risk factors” in BP’s Annual Report and Form 20-F 2018 as filed with the US Securities and Exchange Commission.