* Aims to cut emissions from own barrels to zero by 2050
* No details on how targets will be achieved
* To merge upstream and downstream businesses
(Adds detail, share price, Greenpeace reaction)
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
111-year old company's history by new chief executive Bernard
Looney.
The targets set on Wednesday put BP ahead of rivals Royal
Dutch Shell and Total. Although they fall
short of commitments by Spanish peer Repsol, BP's
operations and output are much larger.
"We need to reinvent BP," Looney said in a statement, adding
on Instagram: "Simply put, we have got to change. We want to
change. And we will change."
BP did not specify how it intends to reach its target to get
carbon emissions from its operations and barrels produced to net
zero by 2050 and halve the carbon intensity of all products it
sells, such as diesel or petrol, in the same time frame.
This is not the first time BP has tried to reinvent itself.
A pioneering "Beyond Petroleum" plan to build a large renewables
business in the early 2000s ended with huge losses.
The world’s top oil and gas companies have come under heavy
pressure from investors and climate activists to fall in line
with the 2015 Paris climate accord which aims to limit 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," he added.
Shares in BP were up 1% at 1157 GMT, slightly higher than
the broader European energy sector index after
Wednesday's announcement, which confirmed a Reuters report from
January.
BP's absolute net zero carbon target relates to the entire
value chain of every barrel it produces, in equity terms, from
the well to the petrol station. Oil field equity is typically
split between different owners.
BP produced around 2.64 million barrels of oil equivalent
per day in 2019. 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.
The group said this target would reduce its emissions to net
zero from what is currently around 415 million tonnes of carbon
dioxide equivalent a year.
BP did not provide any details, but a spokesman said it will
develop near-term plans that will be published at a September
investor day or earlier.
One way a heavy carbon emitter can reach greenhouse gas
reduction targets is by buying offset certificates.
U.S. groups such as Exxon, Chevron and
ConocoPhillips are far less ambitious with their
greenhouse gas related targets than their European rivals.
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? Will it be through
offsetting? 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.
BP said it will set "new expectations" for its
relationships with trade organisations and be prepared to quit
them if they were not aligned.
REORGANISATION
In one of its biggest 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.
"In order to keep up with rapidly-evolving customer demands
and society’s expectations, we need to become more integrated
and more focused," Looney said.
A production and operations unit, which include oil and gas
production as well as refining and chemicals, will be led by
Gordon Birrell.
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)
