BP Restructures for Net-Zero Carbon Future
UK major BP has unfolded its long-awaited restructuring plans, as the new CEO Bernard Looney readies the company for a net-zero business by 2050.
He said February 12: “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. To deliver that, trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system. It will require nothing short of reimagining energy as we know it."
The company aims to achieve this seismic shift while strengthening its safety performance and without detriment to its "investor proposition of growing sustainable free cash flow and distributions to shareholders over the long term." Balance-sheet deleveraging and capital discipline remain core goals and it is sticking to its free cash flow targets for 2021.
Looney said: "BP needs to continue to perform as we transform. As committed as I am to making transformation happen, I am equally committed to some fundamental principles that have served us well."
BP’s business segments – upstream and downstream – will be dismantled and the group reorganised globally into 11 teams. The heads of these teams will make up BP’s new leadership team.
Production & Operations, led by Gordon Birrell, will be BP’s new operational centre, focused on driving safety, efficiency and value growth.
Customers & Products, headed by Emma Delaney, will focus on customers as the driving force for the energy products and services of the future, and on customer experience and expansion in rapidly changing markets.
Gas & Low Carbon Energy, led by Dev Sanyal, will unite energy teams dispersed around BP to create focused low carbon solutions as well as new value chains such as hydrogen and carbon capture, use and storage.
Innovation & Engineering, headed by David Eyton, will aim to invest in new ideas and profit from disruptive opportunities. It will also house BP’s engineering discipline and safety and operational risk team.
Further, there will be three "integrators" whose job it will be to find and maximise opportunities for BP:
Strategy & Sustainability, headed by Giulia Chierchia, who is joining BP from McKinsey, will ensure that sustainability is embedded at the top of BP and provide a single group-wide approach to strategy and capital allocation.
Regions, Cities & Solutions, led by William Lin, will build relationships with regions, cities and large corporations, aiming to develop integrated energy and carbon solutions that can bring emissions down at scale.
Trading & Shipping, led by Carol Howle, will build on BP’s existing deep expertise in its existing business to more effectively help BP capture new commercial opportunities and add value.
And there will be a new communications and advocacy department, joining the finance and legal and personnel departments.