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* Aims to cut emissions from own barrels to zero by 2050
* Net zero target only partially covers Scope 3
* No details on how targets will be achieved
* To merge upstream and downstream businesses
* Big Oil's varying climate targets
(Adds details, quote from Looney, updates share price)
By Ron Bousso and Shadia Nasralla
LONDON, Feb 12 (Reuters) - BP plans deep cuts to its carbon
emissions by 2050, setting one of the oil sector's most
ambitious targets, as part of the biggest overhaul in the
company's 111-year history by new chief executive Bernard
Looney.
The targets set out by Looney on Wednesday put BP ahead of
rivals Royal Dutch Shell, Total, Equinor
and all of the U.S. oil majors.
"We have got to change and change profoundly because the
world is changing fast and so are society’s expectations of us,"
he said in his first major speech as CEO.
"We need to reinvent BP," he said earlier in a statement.
BP did not specify how it intends to reach its 2050 targets
to get emissions from its operations and barrels produced to net
zero and halve the intensity of emissions by all products it
sells, which include diesel or petrol.
Smaller Spanish rival Repsol has set more ambitious
net zero carbon targets for the oil products it sells, also
known as Scope 3, at a cost of more than $5 billion. This
includes emissions from products it markets but were produced by
other groups, a Repsol spokesman said.
However, the huge scale of BP's operations puts its aims at
the vanguard in oil and gas.
BP has tried reinventing itself before. A pioneering plan to
build a large renewables business in the early 2000s ended with
huge losses.
Since then, the world's top oil and gas companies have come
under heavy pressure from investors and climate activists to
meet the 2015 Paris climate goal of limiting global warming to
below 2 degrees Celsius from pre-industrial levels.
"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," Looney added.
Shares in BP were up 1.3% at 1423 GMT, roughly in line with
the broader European energy sector index after the news,
which confirmed a Reuters report in January.
BP's absolute net zero carbon target relates to every barrel
it produces, based on its equity stake in oil and gas fields,
from the well to the petrol station. It does not encompass oil
products which BP markets but does not produce itself.
This is a uniquely structured target for oil majors, which,
apart from Repsol, have not set any absolute reduction targets
for any of its Scope 3 emissions.
BP, which produced around 2.64 million barrels of oil
equivalent per day in 2019, said it would cut its emissions to
net zero from some 415 million tonnes of carbon dioxide
equivalent a year.
A spokesman said near-term plans would be published by a
September investor day.
One way of reaching greenhouse gas reduction targets is to
offset certificates and bet on carbon capture and storage
technology which is not yet used at a commercial scale.
U.S. groups such as Exxon, Chevron and
ConocoPhillips are far less ambitious with their
greenhouse gas reduction targets than their European rivals.
Anglo-Dutch group Shell has set Scope 3 targets based on
intensity rather than on absolute reduction terms.
Intensity-based targets measure the amount of greenhouse gas
(GHG) emissions per unit of energy or barrel of oil and gas
produced. That means that absolute emissions can rise with
growing production, even if the headline intensity metric falls.
Scope 3 emissions vastly exceed greenhouse gases caused by
the production of crude oil, natural gas and refined products,
including electricity generation, typically by a factor of about
six among oil majors, according to Reuters calculations.
Greenpeace said BP's plan left many questions unanswered.
"How will they reach net zero ... When will they stop
wasting billions on drilling for new oil and gas we can't
burn?," Charlie Kronick, Oil Advisor from Greenpeace UK, said.
'NEW EXPECTATIONS'
BP will set "new expectations" for relationships with trade
organisations and be ready to quit them if they are not aligned.
Last year, BP invested around $500 million in low-carbon
technologies including wind power, electric vehicle battery
charging systems and solar power firm Lightsource BP. That
compared to an overall budget of $15.2 billion in 2019.
In one of its biggest-ever changes, BP will dismantle the
traditional model of an oil and gas production, or upstream,
unit and a refining, trading and marketing, or downstream, unit.
"We need to become more integrated and more focused," Looney
said.
A new production and operations unit, which include oil and
gas production as well as refining and chemicals, will be led by
Gordon Birrell.
Meanwhile, customers and products will be led by Emma
Delaney, gas and low carbon energy by Dev Sanyal, while
innovation and engineering will be led by David Eyton.
(Editing by Louise Heavens and Alexander Smith)
