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(Alliance News) - Oil major BP PLC on Wednesday outlined a plan to become net carbon zero by the middle of this century amid a "fundamental" reorganisation.
BP wants net zero carbon across all operations by 2050 or sooner, including on oil and production assets. It also wants a 50% drop in carbon intensity from all products sold by the same year or sooner.
The energy giant is to install methane measurement instruments at all major processing sites by 2023, as part of a target to cut methane intensity by 50%. Further, BP will also be increasing investment into non-oil and gas businesses "over time".
BP currently produces around 55 million tonnes of carbon dioxide equivalent per year across all worldwide operations. By comparison, the UK produced 451 million tonnes of greenhouse gases in 2018.
As part of this plan, BP will now be reorganising into four business groups: Production & Operations, Customers & Products, Gas & Low Carbon Energy, and Innovation & Engineering.
The company said the changes will have no impact on its balance sheet, shareholder returns, and cash flow plans.
"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 re-plumbing and rewiring the world's energy system. It will require nothing short of reimagining energy as we know it," said Chief Executive Bernard Looney, who only took up his role last week following the release of 2019 financial results.
"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."
BP's Chair Helge Lund added: "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 annual replacement cost profit fell 21% to USD9.99 billion in 2019, it reported last week, due to falling oil and gas prices. Looney took charge at BP on the same day, with former chief executive Bob Dudley stepping down.
Looney was previously head of BP's Upstream business, which includes all oil and gas production.
BP shares were 1.6% higher on Wednesday morning in London at a price of 476.85 pence each.
By George Collard; georgecollard@alliancenews.com
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