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BP Will Continue To Produce Oil And Gas For Decades, Says CEO Looney

BP Will Continue To Produce Oil And Gas For Decades, Says CEO Looney
Even though BP is reducing its output for fossil fuels as a part of its strategy to shift to low-carbon energy, the Chief Executive of the company Bernard Looney still believes that the oil and gas major will continue to produce hydrocarbons for decades to come and will also benefit from increase in oil prices at the same time.
Looney said in an interview at the Reuters Events: Global Energy Transition conference that the recent rise in global crude prices is likely to continue. The crude prices surged to a more than two-year high above $75 a barrel on Tuesday.
"There's a very strong possibility that these prices will sustain over the coming years, and if they do, that's very good for our strategy," Looney said.
Looney said that with the increase in oil prices, the company would be able to generate more cash from selling of its assets and the company plans to use that cash for building its renewables and low-carbon business. It also plans to give away the remaining money to shareholders through share buybacks.
While setting aside concerns of investors that BP might not benefit from the surge in prices for crude oil because of its plan to slash oil output by 40 per cent while focusing more on increasing the output of its renewable energy sources by 20 folds by 2030 as part of its energy transition, the 50-year old Irishman appeared pretty confident of the company reaping the benefits of the surge in oil prices globally.
"As people understand we're going to be in the hydrocarbons business for decades to come, that concern has gone away a little bit," Looney said. "We want to run the best hydrocarbons business possible. We don't want to run the biggest hydrocarbons business possible," Looney added.
Late last year, the share price of BP hit its lowest since the mid-1990s which was a drop that was bigger than any of its peers in the industry even as global oil prices continued to fall and there were concerns among investors about the business strategy adopted by the company.
Global oil prices have staged a recovery since the Covid-19 pandemic lows even though the prices are about 30 per cent lower than the prices prior to the pandemic.
"What we offer investors is a stable, resilient dividend," Looney said. "We're going to grow value from this company over the next five years."
"We're going to offer you a sustainable investment proposition that I believe will grow value," he added.
While saying that the energy transition at the company will continue to evolve over time, Looney said that he feels "at a good place" at the moment even though investors are pushing oil and gas companies to create more efficient strategies for addressing greenhouse gas emissions.
"We have leaned into this as hard as we can," Looney said. "We will continue to evolve the strategy, we will continue to evolve our targets. They will undoubtedly get bolder over time."

Christopher J. Mitchell

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