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Again, I'd argue the alternate view - many large co's have their own stated ESG goals and are responsible to investors, they need to find ways to decarbonise whichever major power hungry industry they play in. You already see this now with firms moving towards biofuels which command a premium. - https://biofuels-news.com/news/dhl-to-transition-on-site-fuelling-stations-from-diesel-to-hvo-by-the-end-of-the-year/
as for "there is no such things as a green electron" - there is and there's different ways to trade this green electron which create commercial opps.
"Industry will be able to sell at a premium any item "produced with 100% green energy" (not like the bodge in the UK where my '100% green' energy deal was cheaper than other alternatives)."
Why would this be so? There's no such thing as a "green electron". It's consulting gobbledegook. People will pay for the cheapest energy. No-one's gonna care if it's "green". It's a fad.
All IMHO DYOR
Happy
What with COP28 around the corner, will the share price drift amisly for a couple of weeks. What with the hosts pushing for "Carbon Capture" and the great and good pushing for the demise of oil, it should make for an interesting showdown. King Charles is even tipped to enter politics again with a broken record speech "oil is bad, green is good". Is this time for a oil and gas fightback against a rising tide of gloom. I'm hoping to see if any new technology is rolled out to silence the doomsayers and show the world that oil companies will be around for another 100 years.
Mmm, looks like the UAE are abusing their position, as president of COP28, trying to arrange commercial deals during COP28 (which has upset the UN quite a bit). Shame, as BP were expected to make some sort of announcement there. So says the daily mail.
I think the word "retail" probably doesn't represent the "retail" sector as you would think in typical commercial language - I'd guess it just means they can now sell power to anyone under Japanese law - which would support their comments re: integrated value chain and green electrons (see planits post)
I think the secret might be in their comments about controlling electrons.
BP believe there will be a shortage of power and they want to be in the right places to own the production as well as look after their customers, vertical integration in a broken supply chain.
They want to apply this across the board and be a key player in the market place.
In the future there will be more of a differential between green and non-green power - ie green bio gas and nat gas once the markets (and records) for these things are worked out. Industry will be able to sell at a premium any item "produced with 100% green energy" (not like the bodge in the UK where my '100% green' energy deal was cheaper than other alternatives).
They will want to be producing as much H2 as possible from the huge excess [and almost free] energy produced when it's windy in the UK in the future.
They believe there will be very large margins in energy due to all the bad investment decisions being made and the huge fracture between renewable and fossil. No one else is going for this position and it could be very profitable.
It should also be clear to everyone that investment mistakes will be made (like with some wind*), but these mistakes are only obvious in hindsight, a good company will take risks to maximise profits.
* even with wind if BP are not subject to restrictions they can make more use of the electrons than Renewable companies - they might be able to drain off the power for their H2 if that provides a better price, or charge more than the price cap applied to others. If they have not taken government subsidies they might be able to charge large premiums for the energy produced in the future. No one knows whether the building of wind farms is profitable or not as the energy future might be very different than today.
As Shell found in the UK, fronting an energy retailer amid a cost of living crisis exposes you to all of kinds of reputational and political risk for no profit. I know Japan is a different culture but I can't imagine energy retail is very profitable.
All IMHO DYOR
Happy
Interesting. I'd argue they are coherent and this activity is a natural extension of bp's wind activity in-market to date - establishing the energy value chain play in a G7 market in partnership with a local player.
Https://www.reuters.com/business/energy/bp-enters-japans-power-retail-market-2023-11-27/
These investments make absolutely no sense to me. They're incoherent and lack focus.
We need a strong CEO to develop and present a focused, clear and coherent strategy.
All IMHO DYOR
Happy
Spondulicks: "They may as well resign themselves if they do so." - Yes, please!!
I am not against renewable efforts, especially within liquid and gaseous forms, though. BP should not become an extended arm of politicians, gobvernments etc. at the shareholders' expense, then they should simply nationalise and see if they can do better. It just needs a bit of a reset and the CEO situation is clearly totally unacceptable. If not, then I will look for the next high and move my cash into Shell. Just fits me better if no change here.
You’ve just copied my comment from a few days ago
Planit
To balance your message which isn’t very negative,but merely realistic.
If we are even talking about the possibly of people bidding,it’s an indication that there is still value there to unlock.
That’s very positive.
Also
If US firms stay away because of politics.
That still leaves Shell.
I know they would have political considerations in Netherlands as it would make them even more a UK company.
I don’t think it will happen,but the longer it takes to replace CEO, the more chance there is of it becoming self fulfilling.
At some price it really is a no brainer
The potential for an IEC is 100% there and live - its a hedging strategy to have a diverse power/ energy portfolio as the world weens itself off O&G.
The limited cross-over of renewable technologies isn't a big deal - bp have proved through lightsource they can enter areas of little competency and stand-up a sustainable business - the value, as in O&G is the integrated value chain. What differs in renewables is the production, the rest of the value chain is largely the same, i.e. the renewables power can still be traded, can still be transported to customers or retail sites and sold alongside other areas of the downstream portfolio.
I don't forsee a pivot coming, the IEC strategy is too ingrained in the company, from the board to exec team to what we publish externally to the major shareholders. Imagine the questions if the board and c-suite pivoted now, just three years after they signed such a sector divergent strategy. They may as well resign themselves if they do so.
A bet on bp is a bet that a diverse energy portfolio will come good as governments legislate against carbon, we've seen it in auto and it won't be long until we see it in energy also.
It's not just Aviva, the political class, the people running the pension funds and the biggest shareholders have boards full of people who think it's their duty to achieve the UK's net zero goals. These people have already made their money, are at retirement age and have already lived the high life flying all over the world.
They are hiding behind the excuse they're acting for 'stakeholders' in reducing CO2 emissions rather than make decisions that are the most profitable for shareholders. This current mode of thinking results in the belief they know what's best for everyone; the shareholders or general population are too ignorant to make the 'right' choices.
If BP is to recruit a CEO who is pro-oil and pro-profit they will be going against the tide of UK political thinking. It is a very big ask and I don't see the board doing the difficult thing, in fact the board would need to be replaced for it to happen as they are fully committed to net zero themselves.
Regarding the chances of a takeover from the US, if a company tries it there will be huge resistance from many places that would result in it being very noisy, messy and negative with a large chance of failure. Because of this other companies are going to be very wary.
I didn't mean for this post to be negative, just factual as I see it but reading it back it is not exactly positive for those wanting an 'oil man' or a takeover.
A strong chairman has always been essential.
His job description is to challenge everything, and keep the CEO from going native,and forgetting where his responsibility lie( to the shareholders)
Egon Zehnder will be under the radar, confidental stuff. Very very expensive, but probably the best you can get.
Unlikely small guys and gals like us will ever see a job spec or get any info on the process. That's fair enough, but I have no faith in the board as a whole; some members are probably alright.
I am really struggling with the invisible, weak chairman and effectively having a non-exec undermine BP bidding for further NS licences when you at the same time have around 20 million households in UK heated by natural gas. This is a national security issue. Full stop. Sackable offense in my world.
"Aviva has slammed the government’s decision to expand oil..." City AM
The following from Seeking Alpha
Attractive pipeline
BP has a top-tier upstream pipeline and expects upstream production to increase to 2.3mboe/day by 2025, vs. 2.25mboe/day the previous year. 9 high margin projects with attractive project economics will be commissioned including Seagull in the UK, Mad Dog phase 2 in the US, etc. adding ca. 200kboe/day in new capacity. In addition, BPX (the US onshore operation) will be adding more than 100kboe/day. BPX should grow well into 2030, increasing production by nearly half vs current levels to nearly 650kboe/d. Additional growth areas include the Gulf of Mexico and the UAE. Overall oil liquids production should grow by a CAGR of 3% into 2027, providing upside in a higher-oil price backdrop.
BP is focused on maintaining a mid-teen to 20% IRR hurdle rate with oil at $60/bbl. for new projects. We would also like to note that BP’s breakeven oil price has fallen by nearly three quarters from its peak, and the group is focused on cost optimization and good capital allocation. Ca. 200kboe/d of lower margin production will be divested to optimize the portfolio.
BP expects its oil and gas mix to be balanced by 2030 backed by robust gas demand. LNG supply should increase from 19 million tons per year in 2022 to 25 million tons in 2025 and 30 million tons in 2030. This is underpinned by equity and merchant projects including Tannugh Train 3, GTA Phase 1, Coral, Calcasieu Pass, etc. We believe the robust project pipeline makes possible continued high cash generation and capital returns while financing BP’s green ambitions and its transformation into an integrated energy player. BP's attractive pipeline and portfolio optimization efforts are key elements of our long thesis on BP.
https://seekingalpha.com/article/4654100-bp-integrated-energy-major-with-attractive-mid-term-returns
The eco people are very iddiootiiic if they charge more than the petrol.
Does not make any sense. Until it's cheapter than petrol - no point in buying electric car.
Facts you eco-idiootttssss
Excellent article about the BP electric vehicle charge station at the Birmingham National Exhibitions centre.
Apparently BP are charging over 70p kw. The article states that the break even between petrol/ electric is 25p Kw. It doesn't seem like a wise investment to me. Another example of daft Looney dreams costing shareholders a fortune.
https://www.dailymail.co.uk/money/electriccars/article-12786623/britains-biggest-ev-hub-nightmare-paying-expensive-home.html?ito=link_share_article-factbox
Trying to read the tea leaves from it all.
Think there have been a few leaks from the board, which suggests that there are people there,who share some of the concerns voiced here.
To use the line from a song
“ Things can only get better”
Dr Patients, Meoryou.
"In the aftermath of Looney’s departure, chair Helge Lund favoured an internal hire, but 10 weeks later no preferred candidate has emerged, according to people with knowledge of the process."
So this can confirm that the entire BOD including the Chairman were only looking for a Looney Clone to carry on with his ruinous "Green Policies" from within BP. But did we not have BP employee from America who put himself forward, then resigned when his application was rejected without consideration. Was it that the BOD considered this employee was too Oil and Gas focused. I hope the employment agency engaged by the BOD is not "Green Biased" and will welcome applications who are not necessarily wedded to "Net Zero" policy's. The application process must be made public after an appointment is made to ensue that it is open to scrutiny.
Dr P
The only plus side is if it gets fixed the sp will jump.
Looking more likely to be an external candidate.
With all that’s going on maybe £4.75 is actually a remarkably good price.
There must be a huge up side, and the possibility of Shell stepping in can never have been larger.
Meoryou, a very good, but damning read.
"In the aftermath of Looney’s departure, chair Helge Lund favoured an internal hire, but 10 weeks later no preferred candidate has emerged, according to people with knowledge of the process."
Hopefully large shareholders are pushing back including evaluating the appropriateness of each board member.
Otherwise, it is just money for nothing!!