bp to invest up to $8B additional in transition growth engines by 2030, for cumulative $55-65B over 2023-2030
08 February 2023
bp says that it will invest more in the energy transition and bp’s own transition, with up to $8 billion more slated for transition growth engines (TGEs) by 2030. These include higher-return bioenergy, and convenience & EV charging; and focusing hydrogen and renewables & power where bp can leverage integration.
In 2022, bp invested $4.9 billion—around 30% of its total $16.3 billion capital expenditure—nto its transition growth engines, including the acquisition of Archaea Energy. This compares to around 3% in 2019. bp continues to expect this proportion to grow to around 50% in 2030.
bp aims to increase investment in its TGEs by up to $1 billion a year on average, or up to a cumulative additional $8 billion to 2030. bp’s investment in its TGEs is now expected to reach $7-9 billion a year in 2030—with cumulative investment over 2023-2030 around $55-65 billion.
Bioenergy: bp plans to grow its established bioenergy businesses materially. It plans to increase its supply of biogas six-fold, underpinned by Archaea Energy, to up to 70,000 barrels of oil equivalent a day in 2030. bp aims to increase biofuel production to around 100,000 barrels a day by 2030, supported by five major new projects at bp refineries, focused on production of sustainable aviation fuel.
Convenience and EV charging: Expansion of bp’s strategic convenience site networks is expected to drive growth in bp’s convenience gross margin by around 10% a year to 2030. Together with EV charging they are expected to help grow bp’s ability to offer lower carbon transport solutions for customers. Today bp has 22,000 EV charge points and aims for more than 100,000 by 2030—around 90% rapid or ultra-fast. It is developing leading positions in key geographies worldwide, underpinned by partnerships with major fleet operators.
Hydrogen: Through this decade bp aims to establish the foundations of a material business for the future. bp aims to build a leading position globally in hydrogen, initially supplying its own refineries, scaling up to meet growing customer demand and in parallel, as markets develop, 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.
Renewables & power: bp will focus investment on opportunities where it can create integration value and enhance returns. bp aims to build a portfolio—including a global position in offshore wind—in support of green hydrogen, e-fuels, EV charging and power trading, together with continued growth in its self-funded solar joint venture Lightsource bp. bp remains on track to deliver its aim of having developed 50GW renewable power to FID by 2030; of this it aims to have around 10GW net installed capacity—largely operated. bp also expects to have assets under construction and for Lightsource bp to contribute materially.
by will also invest up to a cumulative $8 billion more into oil and gas by 2030—targeting short-cycle fast-payback opportunities with lower additional operational emissions. This investment will help to meet near-term demand for secure supplies of oil and gas, generating additional earnings that can further strengthen bp and support investment in its transition, the ocmpany said.
hile bp will continue to high-grade its global oil and gas portfolio, due to improving operational reliability and commerciality over the past four years it also now anticipates retaining some oil and gas assets longer than previously envisaged.
As a result of these changes, bp anticipates its oil and gas production will be around 2.3 million barrels of oil equivalent a day (mmboe/d) in 2025 and aims for it to be around 2.0 mmboe/d in 2030. This 2030 production would be around 25% lower than bp’s production in 2019, excluding production from Rosneft, compared to bp’s previous expectation of a reduction of around 40%.
bp correspondingly now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%.
It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon—all three together, what’s known as the energy trilemma. To tackle that, action is needed to accelerate the transition. And—at the same time—action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it’s needed today.
As an integrated energy company, bp is very deliberately set up to help on both counts. With three years of delivery and track record—we have increased confidence our strategy is working. And with today’s announcement we are leaning further in. We are growing our investment into our transition and, at the same time, growing investment into today’s energy system. In doing so—we see tremendous opportunity to create value. And it’s what governments and customers are asking of companies like us.—Bernard Looney
In 2022, bp delivered EBITDA of $61 billion, operating cash flow of $41 billion, including around $7 billion working capital build, and reported underlying replacement cost profit of $28 billion.
It continued to strengthen its finances, reducing net debt by $9.2 billion over the year to $21.4 billion—the lowest for over nine years. ROACE for the year was 30.5%. For 2022, bp incurred a total tax charge of $15.1 billion on an underlying basis, representing an effective tax rate of 34%.