* 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
* Big Oil's varying climate targets
(Adds details)
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 on Wednesday put BP ahead of rivals Royal
Dutch Shell, Total, Equinor and all
of the U.S. oil majors.
"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 2050 targets
to get carbon emissions from its operations and barrels produced
to net zero and halve the carbon intensity of all products it
sells, such as diesel or petrol.
Smaller Spanish rival Repsol has set more ambitious
net zero carbon targets for the oil products it sells, at a cost
of more than $5 billion, but the huge scale of its operations
now puts BP's 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% 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 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 produced around 2.64 million barrels of oil equivalent
per day in 2019. The group said it would reduce its emissions to
net zero from around 415 million tonnes of carbon dioxide
equivalent a year.
BP did not provide any details, but a spokesman said
near-term plans would be published by a September investor day.
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.
'NEW EXPECTATIONS'
BP said it will set "new expectations" for its relationships
with trade organisations and be prepared to quit them if they
were 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 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)
