British Petroleum will cut oil and gas production by 40% in the next 10 years

British Petroleum will cut oil and gas production by 40% in the next 10 years

August 8, 2020 0 By autotimesnews

Oil and gas giant British Petroleum released its first half 2020 earnings and details of a plan that will see the company achieve zero carbon emissions by 2050. BP plans to cut oil and gas production by 40% over ten years, invest heavily in green energy sources and, over time, intend to fully switch to alternative activities.

BP analysts estimate that demand for fossil fuels will fall by 75% by 2050 if the average annual temperature of the Earth rises within 1.5 ° C. If global warming warms the planet more, the fall could be even greater. The company wants to stay ahead of the curve and prepare for the new business environment in the next 10 years, and by 2050, completely withdraw from the production and processing of hydrocarbons.

BP said its oil and gas production will drop by about one million barrels per day by 2030, down 40% from 2019 levels. However, most of its annual capital expenditure over the next 5 years will continue to be in oil and gas. It is a business imperative to maintain key business metrics and implement a company’s phased transition to green energy.

BP’s plan also includes investments in bioenergy, hydrogen and carbon capture and storage, and infrastructure development for electric vehicles. The company has already installed 7.5 thousand charging stations for electric vehicles and plans to expand the network to 70 thousand points. Funds for this in the amount of $ 25 billion will be received from the sale of oil and gas assets over the next five years.

With regard to the current financial performance of British Petroleum, the company suffered losses of $ 21.2 billion against profit in the second half of 2019. Total revenue fell 35.7% to $ 90.73 billion. Brent crude fell to an 18-year low in April, stopped at $ 20 a barrel, but still returned to $ 44 in May. The company also noted that revenue in the third quarter of 2020 will decline even more due to higher maintenance prices, seasonal work and the coronavirus pandemic.

The company has already sold its petrochemical division and announced that it plans to cut 10,000 jobs due to falling mineral prices. The restructuring will cost BP $ 1.5 billion and will end by the end of 2020. After the announcement of a new development strategy, BP shares rose 8%.