BP has detailed in a strategy update that the oil and gas giant will invest up to £54 billion ($65 billion) in its transition growth engines (TGEs) but has reduced its emissions reduction target by 2030 due to continued investment in oil and gas.
Despite the firm set to continue to increase investment within the company’s renewable businesses, BP is still set to invest up to $8 billion in its oil and gas assets. As a result, the company has slashed its 2030 emissions reduction target from 35-40% to 20%-30%, when compared with 2019 levels.
The updated strategy comes as BP confirmed it more than doubled its annual profit in 2022 to £23 billion ($27.7 billion), up from the £10.6 billion ($12.8 billion) witnessed in 2021, owing to soaring oil and gas prices.
Earnings from BP’s TGEs are expected to grow as a result of increased investment and popularity in renewables. The firm stated that it now expects the TGEs to deliver up to £3.34 billion ($4 billion) EBITDA in 2025 and is aiming for £10 billion ($12 billion) in 2030.
BP believes the 2030 EBITDA for TGEs will consist of over £3.34 billion ($4 billion) from bioenergy, over £3.34 billion ($4 billion) from convenience and EV charging, and up to £2.5 billion ($3 billion) from hydrogen and renewables and power.
“We will increase our focus on the transition growth engines able to deliver nearer-term solutions – like EV chargers and sustainable aviation fuels – that can help people and businesses decarbonise sooner,” said Bernard Looney, CEO of BP.
“We will continue to build our hydrogen and renewables and power businesses for the longer term, based around projects where bp’s integrated approach can create significant additional value.”
BP also stated that it is targeting a group EBITDA of up to £40.9 billion ($49 billion) in 2025 and is aiming for around £46.76 billion ($56 billion) in 2030.
Included within the strategy are several commitments for EV charging, renewables and power and hydrogen.
For EV charging, BP stated that the expansions of its strategic convenience site networks is expected to drive growth in the firm’s convenience gross margin by around 10% annually to 2030. This will help enable the scaling of the firm’s EV charging network with this set to increase to more than 100,000 globally by 2030. 90% of these are expected to be rapid or ultra-fast chargers.
In reference to hydrogen, BP has established plans to take a leading role globally in this impending market. This will be achieved by supplying its own refineries, scaling up to meet growing customer demand and developing global export hubs for hydrogen and its derivatives.
By 2030 BP aims to produce between 0.5-0.7 million tonnes a year of primarily green hydrogen, also pursuing selected blue hydrogen opportunities.
BP will also continue to build a global portfolio of offshore wind projects to support various industries. The firm will also expand its solar portfolio via Lightsource BP. The firm said it remains on track to deliver its aim of having developed 50GW renewable power to final investment decision by 2030.
“We need continuing near-term investment into today’s energy system – which depends on oil and gas – to meet today’s demands and to make sure the transition is an orderly one. We have high-quality options throughout our portfolio, allowing us to choose only the best,” Looney said.
“We will prioritise projects where we can deliver quickly, at low cost, using our existing infrastructure, allowing us to minimise additional emissions and maximise both value and our contribution to energy security and affordability.”
