* 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 on BP's future production, Extinction Rebellion
and investor quotes)
By Ron Bousso and Shadia Nasralla
LONDON, Feb 12 (Reuters) - BP set one of the oil sector's
most ambitious targets for curbing carbon emissions on Wednesday
as new chief executive Bernard Looney began the biggest revamp
in its 111-year history.
While investor groups welcomed the 2050 targets set out by
Looney, which put BP ahead of rivals Royal Dutch Shell,
Total, Equinor and all of the U.S. oil
majors, environmental campaigners criticised a lack of detail.
"We have got to change and change profoundly because the
world is changing fast and so are society's expectations of us,"
Looney said in his first major speech as CEO, after earlier
highlighting a need to "reinvent BP".
"It is aiming to reduce and neutralise the carbon in the oil
and gas that we dig out of the ground," Looney added.
BP did not say how it intends to get emissions from its
operations and barrels produced to net zero and halve the
intensity of emissions by all products it sells, including
diesel and petrol, a measure known as Scope 3.
The company has tried, and failed, to reinvent itself
before, with a pioneering plan to build a large renewables
business in the early 2000s which ended with huge losses.
One possible way to hit greenhouse gas reduction targets is
to buy offset certificates and bet on carbon capture and storage
technology, which is not yet used on a commercial scale.
But Charlie Kronick, Oil Advisor from Greenpeace UK, was
sceptical about how BP can deliver.
"How will they reach net zero ... When will they stop
wasting billions on drilling for new oil and gas we can't burn?"
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.
RAPID TRANSITION
The world's top oil and gas companies are 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.
U.S. groups such as Exxon, Chevron and
ConocoPhillips are far less ambitious with their
greenhouse gas reduction targets than their European rivals.
Stephanie Pfeifer, a member of the global Climate Action
100+ Steering Committee and CEO of the Institutional Investors
Group on Climate Change welcomed BP's plan.
"Building on the positive engagement with BP ... investors
will continue to look for progress from the company in
addressing climate change. This includes how it will invest more
in non-oil and gas businesses," she said in a statement.
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.
BP, which produced around 2.64 million barrels of oil
equivalent per day in 2019, said it would cut emissions to net
zero from some 415 million tonnes of carbon dioxide equivalent a
year.
Near term plans will be published by a September investor
day, Looney said, adding BP is likely to produce fewer barrels
by 2050.
"We welcome BP’s recognition of the reality we now live in
but 2050 is too late," a spokeswoman for climate change activist
group Extinction Rebellion said.
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.
'NEW EXPECTATIONS'
BP will also set "new expectations" for relationships with
trade organisations and be ready to quit 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 perhaps its biggest-ever corporate shake-up, BP will
dismantle the traditional model of an oil and gas production, or
upstream, unit and a refining, trading and marketing, or
downstream, unit to "become more integrated and more focused".
A new production and operations unit, which includes 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 and
innovation and engineering by David Eyton.
(Editing by Louise Heavens and Alexander Smith)
