THE head of BP’s business in the UK and Europe, Peter Mather, has insisted the oil and gas giant can help tackle the problem of climate change while maintaining a big North Sea production business for decades.
Majors such as BP have faced a barrage of criticism from activists who have called for a halt to oil and gas production in order to prevent global warming reaching critical levels.
Read more: Campaigners vow further action as oil rig heads to North Sea
However, Mr Mather said BP could play a vital role in helping meet growing global demand for energy and in reducing carbon emissions in the process.
He noted: “Satisfying growing energy demand but not increasing and in fact reducing emissions, getting towards net zero by the middle of the century, that’s what we’ve signed up to.”
Mr Mather said BP supports efforts to reduce carbon emissions net of the amounts absorbed to zero by around 2050. He believes the much shorter time frames favoured by some campaigners could entail action that would penalise the poor.
“Net zero by 2025 in our view is not feasible and not actually necessarily what the world needs,” observed Mr Mather, adding: “We’ve got to decarbonise energy but energy brings people out of poverty, gives them access to heat, power and mobility. A billion people on this planet don’t have access to electricity and another couple of billion coming on to the planet.”
With growth in demand for energy being driven by developing nations, BP bosses think natural gas will be essential to reducing reliance on more carbon intensive coal.
Oil will be needed for use in petrochemicals and to provide transportation fuel for “hard to electrify” sectors such as aviation, road freight and marine.
Read more: North Sea growth on agenda at BP as oil giant doubles profits
Against that backdrop, Mr Mather said the company expects to maintain a sizeable North Sea exploration and production business for years to come.
“We see a future for the North Sea and it’s actually quite an exciting future,” said Mr Mather, who held out the prospect the area could become a beacon for “how to do oil and gas in a decarbonising world.”
Asked how BP is helping tackle climate change, Mr Mather said the company is focused on reducing the carbon emissions generated by its operations, improving the products it sells and on helping to maximise the potential of renewable energy technologies.
The company’s activities in the UK provide examples of how it is investing for the long term while achieving the earnings required to support multi-billion payouts to investors in the stock market-listed business.
Read more: BP expects production at giant Shetland oil field to last for decades
Mr Mather noted that it has developed drones to monitor methane emissions from its North Sea facilities among other innovations.
The North Sea is an important source of gas, which Mr Mather said generated half the emissions of coal when combusted.
“Some people see gas as a transition fuel, we actually see it as a destination fuel, particularly decarbonised gas” said Mr Mather.
However, he added: “There’s no way that the UK can get to net zero carbon emissions without carbon capture and storage (CCS).”
Although there have been no CCS projects of scale in the North Sea Mr Mather is confident one will be developed within the next five years.
Read more: 'Vague and ambiguous' government approach puts carbon capture bonanza at risk say MPs
He said BP is playing a leading role in planning for a development in the Teeside area, which could become significant.
While BP slashed spending and jobs in the North Sea amid the downturn triggered by the sharp fall in the crude price from 2014, Mr Mather noted it had invested billions developing bumper fields West of Shetland.
These form part of a portfolio of what BP regards as “advantaged” oil projects, from which it can generate good returns.
Mr Mather noted BP has played an important role in supporting the shift to electric vehicles in the UK. After acquiring the Chargemaster business for £130m last year it is the largest operator of charging points in the UK.
While the total sums invested in renewables remain well below the amounts spent on the firm’s oil and gas operations Mr Mather said the headline figures fail to reflect the full picture.
He noted a $200m investment in the Lightsource solar business had helped the European venture secure around $6bn funding.
“We do spend a lot more than the $500m that people talk about because a lot our spend is hidden within the existing matures businesses,” added Mr Mather.
“If you look at what we are investing in lowering the footprint of our existing businesses you get well above a billion dollars which is more than most FTSE companies spend on capital overall.”
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