BP CEO Bernard Looney identified hydrogen as the emerging energy transition solution he is most interested in at IP Week this morning. He said new technologies around hydrogen and carbon capture and storage will play a vital role in the transition as long as they can achieve scale.

“The technology that has the most potential I think in the medium-to-longer term is hydrogen,” said Looney. “As we look at 2030 [and beyond]… I think hydrogen will play a significant role whether it is in industrial, heating, mobility etc. BP intends to play a major role in that. We would like to capture about 10pc of these key markets when they evolve.”

The CEO has made renewables a key component of his dual business goals of diversification and decarbonisation. However, Looney—who succeeded Bob Dudley one year ago—insisted that oil and gas would still play a role in the long-term future of both the company and society.

“[Under] any scenario you look at, oil and gas are going to be in the world’s energy system for decades to come. It may not be popular to say, but that is the reality” Looney, BP

“You cannot go against the will of society, and society is asking for renewables,” Looney told delegates. “Is it starting from a small base? Yes, but it is growing incredibly fast.

“We [will be] growing the renewable business 20 times over the next decade. We are also going to run the best oil and gas business possible. It will be 40pc smaller, but with higher margin and lower emissions. [Under] any scenario you look at, oil and gas are going to be in the world’s energy system for decades to come. It may not be popular to say, but that is the reality.”

BP suffered heavily in 2020 from the oil crash and registered a full-year underlying replacement loss of $5.7bn (£4.2bn). During this time, the FTSE 100 firm embarked on an aggressive cost-cutting programme and transition project, which has resulted in 10,000 job losses.

Like all oil and gas giants, BP’s renewable claims have attracted criticism. However, Looney stressed to delegates that the company is taking these new projects seriously.

“We have told investors we will deliver 8pc to 10pc on our projects—and we will,” said Looney. “If we cannot [deliver], we will not do it. We walked away from over 10GW of deals in the fourth quarter because we could not meet our return threshold.

“Investors want to see execution and track record. They want to see the 8pc to 10pc being delivered. We have done the theoretical work—it is now about getting our heads down and focusing on execution.”

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Author: Jon Yarker