British energy giant BP will increase its annual low-carbon spending to $5 billion a year by 2030 and boost its renewable power generation to 50 gigawatts (GW) while shrinking oil and gas output by 40% compared with 2019, it said on Tuesday.
The company's portfolio aims at developing new renewables, bioenergy and early positions in hydrogen and carbon capture and storage technologies, with the majority of the budget to be invested by 2025.
As per annual capital expenditure including inorganic investment, BP said it intends to maintain it in a range of $14-16 billion to 2025.
BP also expects to rebalance its sources and cash uses to a balance point of around $40 per barrel of Brent, on average over 2021-25, assuming an average BP refining marker margin of about $11 a barrel and Henry Hub at $3 per million British Thermal Unit (mmBTU) in real terms in 2020.
Over the same period, BP's oil and gas production is expected to reduce by at least one million barrels of oil equivalent a day, or 40%, from 2019 levels, the company said, adding that it would cease exploring for oil and gas in new countries.
"BP today introduces a new strategy that will reshape its business as it pivots from being an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers," it said.
The company's dividend reset to a resilient level of 5.25 cents per share per quarter, and intended to remain fixed at this level, subject to the board’s decision each quarter, supplemented.
British energy giant BP reported a $16.8 billion loss in the second quarter of 2020 due to the negative impact of the novel coronavirus (COVID-19) on the oil market, according to its financial results statement released on Tuesday.
On June 15, BP revised down its Brent crude price estimate to an average of $55 a barrel from 2021-2050.
By Gokce Kucuk Topbas