SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
for the
period ended 12
February, 2020
BP p.l.c.
(Translation
of registrant's name into English)
1 ST JAMES'S SQUARE, LONDON, SW1Y 4PD, ENGLAND
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file
annual
reports
under cover Form 20-F or Form 40-F.
Form
20-F |X| Form 40-F
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Indicate
by check mark whether the registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of
1934.
Yes No
|X|
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12 February 2020
BP sets ambition for net zero by 2050, fundamentally
changing organisation to deliver
BP today set a new ambition to become a net zero company by 2050 or
sooner, and to help the world get to net zero. The ambition is
supported by ten aims:
Five aims to get BP to net zero:
1.
Net zero across BP's operations on an absolute basis by 2050 or
sooner.
2.
Net zero on carbon in BP's oil and gas production on an absolute
basis by 2050 or sooner.
3.
50% cut in the carbon intensity of products BP sells by 2050 or
sooner.
4.
Install methane measurement at all BP's major oil and gas
processing sites by 2023 and reduce methane intensity of operations
by 50%.
5.
Increase the proportion of investment into non-oil and gas
businesses over time.
Five aims to help the world get to net zero:
6.
More active advocacy for policies that support net zero, including
carbon pricing.
7.
Further incentivise BP's workforce to deliver aims and mobilise
them to advocate for net zero.
8.
Set new expectations for relationships with trade
associations.
9.
Aim to be recognised as a leader for transparency of reporting,
including supporting the recommendations of the TCFD.
10.
Launch a new team to help countries, cities and large companies
decarbonise.
To deliver the ambition, BP will fundamentally reorganise to become
a more focused, more integrated company, comprising:
●
Four
business groups to deliver performance and value
growth:
Production &
Operations; Customers &
Products; Gas & Low
Carbon Energy; and Innovation &
Engineering.
●
Three
integrators to identify and maximise opportunities:
Sustainability &
Strategy; Regions, Cities &
Solutions;
and Trading &
Shipping.
●
Four
core enablers to support business delivery:
Finance; Legal; People &
Culture;
and Communications &
Advocacy.
BP is committed to performing while transforming:
No
change to BP's fundamental commitments:
●
to
safe and reliable operations
●
to
delivering BP's investor proposition, including commitments
on:
- growing sustainable free cash flow and shareholder
distributions over long term;
-
maintaining
strong financial frame and cost and capital discipline, and
deleveraging the balance sheet;
-
delivering
2021 free cash flow targets.
BP will host a capital markets day in September to set out its
strategy and near-term plans.
New purpose and ambition
BP's
new CEO Bernard Looney today announces a new purpose and a new
ambition for the company.
BP's new purpose is reimagining energy for people
and our planet.
The purpose is underpinned by an industry-leading
ambition -- for BP to become a net zero
company by 2050 or sooner, and to help the world get to net
zero - and this ambition
is supported by ten aims.
To
deliver all this, BP will fundamentally transform its whole
organisation, and maintain its commitment to performing while
transforming.
Bernard
Looney said:
"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.
"This will certainly be a challenge, but also a tremendous
opportunity. It is clear to me, and to our stakeholders, that for
BP to play our part and serve our purpose, we have to change. And
we want to change - this is the right thing for the world and for
BP."
Helge
Lund, BP's chairman, commented:
"Energy markets are changing, driven by climate change, technology
and societal expectations, and the Board supports Bernard and his
new leadership team´s ambition for BP. Aiming for net zero is
not only the right thing for BP, it is the right thing for our
shareholders and for society more broadly. As we embark on this
ambitious agenda, we will maintain a strong focus on safe, reliable
and efficient operations and on delivering the promises we have
made to our investors."
Reimagining energy
BP's new ambition to be a net zero company by 2050
or sooner covers the greenhouse gas emissions from its operations
worldwide, currently around 55 million tonnes of
CO2 equivalent
(MteCO2e)
a year, and the carbon in the oil and gas that it produces,
equivalent currently to around 360 MteCO2e
emissions a year - both on an absolute basis. Taken together,
delivery of these aims would equate to a reduction in emissions to
net zero from what is currently around 415 MteCO2e
a year.
"This is what we mean by
making BP net zero. It directly addresses all the carbon we get out
of the ground as well as all the greenhouse gases we emit from our
operations. These will be absolute reductions, which is what the
world needs. If this were to happen to every barrel of oil and gas
produced, the emissions problem for our sector would be solved. But
of course, the world is not that simple; the whole energy system
has to be transformed and everyone has a contribution to make -
producers and sellers of energy, policy makers and everyone who
uses energy" - Bernard
Looney.
Therefore,
BP also aims to help its customers reduce their emissions by
halving the carbon intensity of the products it sells, again by
2050 or sooner - offering customers more and better choices of low-
and no-carbon products.
BP
also aims to install methane measurement at all of its existing
major oil and gas processing sites by 2023 and then reduce the
methane intensity of its operations by 50%.
And
over time BP also aims to increase the proportion of investment it
makes into non-oil and gas businesses:
"We expect to invest more in
low carbon businesses - and less in oil and gas - over time. The
goal is to invest wisely, into businesses where we can add value,
develop at scale, and deliver competitive returns"
- Bernard
Looney.
The
ambition also includes a series of aims targeted at supporting the
world's progress towards net zero:
●
More
actively advocating for policies that support net zero, including
carbon pricing; stopping corporate reputation advertising and
redirecting resources to promote net zero policies, ideas, actions,
collaborations and its own net zero ambition.
●
Incentivising
BP's global workforce to deliver on the aims and mobilise them to
become advocates for net zero; increasing the percentage of
remuneration linked to emissions reductions.
●
Setting
new expectations for BP's relationships with trade associations,
making the case for BP's views on climate change, being transparent
where views differ, and being prepared to leave those where
alignment cannot be reached.
●
Being
recognised as an industry leader for the transparency of reporting,
working constructively with the TCFD and other groups to develop
good practices and standards for transparency of reporting. BP
today announced its support for the recommendations of the
TCFD.
●
Launching
a new team to create integrated clean energy and mobility solutions
and to help countries, cities and corporations around the world
decarbonise.
Reinventing BP
The
structure of BP's organisation - and of much of the industry - has
been broadly the same for more than a century, split into separate
organisations - upstream, downstream, and other businesses. To
deliver its new ambition and aims, BP will now undergo a
fundamental reorganisation.
"We need to reinvent BP. Our
historic structure has served us well but, in order to keep up with
rapidly-evolving customer demands and society's expectations, we
need to become more integrated and more focused. So we are
undertaking a major reorganisation, introducing a new structure, a
new leadership team and new ways of working for all of us"
- Bernard
Looney.
Under
the plans, BP's existing, largely autonomous business segments -
upstream and downstream - will be dismantled and the group
reorganised globally into a more focused and more integrated
entity, comprising 11 teams. The heads of these teams will make up
BP's new leadership team.
Performance
and value growth will be delivered by four business
groups:
●
Production &
Operations, led by Gordon Birrell, will be BP's new operational centre,
bringing its operations together, 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
currently dispersed around BP to create focused low carbon
solutions. It will also pursue opportunities in decarbonisation and
new value chains such as hydrogen and CCUS.
●
Innovation &
Engineering, headed by David Eyton, will bring added momentum
to BP's venturing and Launchpad investments and act as a
catalyst for creating value from disruptive opportunities. It will
also house BP's engineering discipline and safety and operational
risk team.
Three
integrators will be established 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.
Four
teams will serve as enablers of business delivery:
●
Finance, led by Murray
Auchincloss.
●
Legal, headed by Eric Nitcher.
●
People &
Culture, headed by Kerry
Dryburgh.
●
Communications &
Advocacy, led by Geoff
Morrell.
Over
the next few months, the new BP leadership team will focus on
building their teams and on developing BP's strategy to deliver the
ambition.
"Together we will aim to build
a more agile, innovative and efficient BP. A purpose-driven,
digitally-enabled, fully-integrated organisation. I'm confident
that this new leadership team, together with all our people, have
the skill and will to turn BP into a thriving sustainable energy
business that is a force for good in a net zero world"
- Bernard
Looney.
Performing while transforming
Despite
the planned group-wide programme of change, BP's fundamental
commitments remain unchanged - to safety and to
investors.
"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. Safe and reliable
operations will always underpin all we do, and we remain committed
to meeting the promises we have made to our shareholders. We can
only reimagine energy if we are financially strong, able to pay the
dividend our owners depend on and to generate the cash to invest in
new low and no-carbon businesses" - Bernard Looney.
BP's
commitment to safe and reliable operations is unchanged with safety
as a core value. The new structure is expected to underpin and
strengthen safety performance.
BP
also remains committed to its investor proposition of growing
sustainable free cash flow and distributions to shareholders over
the long term. It continues to be committed to a strong financial
frame including deleveraging the balance sheet and maintaining
capital discipline, to delivering its free cash flow targets for
2021, and to staying focused on costs and pursuing
efficiencies.
BP
intends to host a capital markets day in September at which the
leadership team will set out more information on BP's strategy and
near-term plans.
Further information:
Notes:
●
This
announcement includes inside information as defined in Article 7 of
the Market Abuse Regulation No. 596/2014. The person responsible
for arranging the release of this announcement on behalf of BP
p.l.c. is Ben Mathews, Company Secretary.
●
BP
expects its external financial reporting to continue on the current
segment basis throughout 2020.
●
For
the purpose of this announcement, the terminology below has the
following meanings:
-
net zero: zero GHG emissions, after deduction of sinks,
removals or reductions and as determined in accordance with BP's
methodologies.
-
on an absolute
basis: measured in terms of
reductions in total GHG emissions, rather than reductions in carbon
intensity per unit of energy.
-
greenhouse gas (GHG) emissions
from its operations: direct
(Scope 1) and indirect (Scope 2) GHG emissions
(CO2 and
methane) emissions on a CO2-equivalent
basis (MteCO2e)
as reported by BP and on the basis of operational control as
defined in BP's 2018 Annual Report and Form 20-F - see page 48 of
BP Annual Report and Form 20-F 2018.
-
carbon in BP's oil and gas
production: estimated
CO2 emissions
assuming combustion of BP's upstream oil and gas production (Scope
3, category 11), on an equity share basis.
-
carbon intensity of products
BP sells: lifecycle GHG
emissions per unit of energy based on marketing sales (as described
on page 32 of BP Annual Report and Form 20-F 2018) of products,
expressed as gCO2e/MJ.
Lifecycle GHG emissions comprise the sum of:
o estimated
GHG emissions from the production, processing and transportation,
whether by BP or other parties, of the product,
and
o estimated
GHG emissions from the assumed combustion of the
product.
-
products: energy products (including fuels, gas, biofuels
and power but excluding products not designed for energy use, such
as lubricants or petrochemical feedstocks), and could in future,
where provided for in BP's methodology, include relevant non-energy
products such as those associated with GHG sinks, removals or
reductions e.g. land carbon projects.
-
methane
intensity: includes the methane
emissions from BP's upstream oil and gas operations as a percentage
of the gas that goes to market from those operations (on the basis
of operational control as defined on page 48 of BP Annual Report
and Form 20-F 2018).
-
equity share
basis: comprises 100% share
from subsidiaries and the percentage of BP's share equivalent to
its share of joint arrangements and associates, but excluding BP's
share of Rosneft.
●
Further
information relating to the above terminology (and related
methodologies) is expected to be contained in the forthcoming BP
Annual Report and Form 20-F 2019 and the BP Sustainability Report
2019. Such terminology and related methodologies may evolve
over time, as may be disclosed from time to time.
Cautionary Statement:
In
order to utilise the 'safe harbor' provisions of the United States
Private Securities Litigation Reform Act of 1995 (the 'PSLRA') and
the general doctrine of cautionary statements, BP is providing the
following cautionary statement: The discussion in this announcement
contains certain aims, ambitions, targets and other forward-looking
statements - that is, statements related to future, not past events
and circumstances - with respect to BP's new purpose, ambition and
structure.
These
statements may generally, but not always, be identified by the use
of words such as 'will', 'expects', 'is expected to', 'aims',
'should', 'may', 'objective', 'ambitions', 'is likely to',
'intends', 'believes', 'anticipates', 'plans', 'we see', 'is
committed to' or similar expressions. In particular, the following,
among other statements, are all forward-looking statements:
BP's new ambition to be a net zero company by 2050 or sooner
including its aims regarding emissions across operations, the
carbon content of its oil and gas production; a 50% cut in the
carbon intensity of products BP sells, methane measurement at major
oil and gas processing sites by 2023 and subsequent reduction of
methane intensity of operations, and aims to increase the
proportion of investment into non-oil and gas businesses over time;
aims to help the world get to net zero; plans for incentivising
BP's global workforce; plans for a wide-ranging restructuring of
the business; the aim to build a more agile, innovative and
efficient BP; continuing commitment to safe and reliable
operations; commitment to continuing to perform as BP transforms;
continuing commitment to the investor proposition including with
respect to growing free cash flow and distributions to shareholders
over long term, deleveraging the balance sheet, capital discipline,
delivering 2021 free cash flow targets and focus on costs and
pursuing efficiencies; and commitment to transparency and advocacy
for a low carbon world.
By
their nature, forward-looking statements involve risk and
uncertainty because they relate to events and depend on
circumstances that will or may occur in the future and are outside
the control of BP. Actual results may differ materially from those
expressed in such statements, depending on a variety of factors,
including: the specific factors identified in the discussions
accompanying such forward-looking statements; societal shifts in
consumer demand; delays to the pace of change; development and use
of new technology; timing of bringing new projects on stream;
ability to exploit growth or investment opportunities; changes in
public expectations and other changes to business conditions;
adverse changes in tax regimes; the timing, quantum and nature of
certain acquisitions and divestments; future levels of industry
product supply, demand and pricing; price and availability of
alternative fuels; operational and safety problems; delays in
developing infrastructure for transportation and distribution;
economic and financial market conditions generally or in various
countries and regions; political and social stability and economic
growth in relevant areas of the world; political and economic
policies in jurisdictions where we operate; changes in laws and
governmental regulations; regulatory or legal actions and the
actions of courts; delays in the processes for resolving claims;
recruitment and retention of a skilled workforce; labour relations
and industrial actions by workers; the success of partnering; the
actions of competitors, trading partners, contractors,
subcontractors, creditors, rating agencies and others; our access
to future financial resources; business disruption and crisis
management; the impact on our reputation of ethical misconduct and
non-compliance with regulatory obligations; natural disasters and
adverse weather conditions; wars and acts of terrorism;
cyber-attacks or sabotage; and other factors discussed elsewhere in
this announcement, and under "Risk factors" in BP's Annual Report
and Form 20-F 2018 as filed with the US Securities and Exchange
Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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BP
p.l.c.
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(Registrant)
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Dated: 12
February 2020
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/s/ Ben
J. S. Mathews
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Ben J.
S. Mathews
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Company
Secretary
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