BP’s “dirty little secret”

 

Bernard Looney became BP’s boss about a year ago and one of the first things he did was to commit the company to a net zero carbon footprint by 2050 or sooner. Quite a statement for such a company to make. Obviously to achieve this, there will have to be some very difficult decisions to make, including potentially getting rid of a number of investments which may be “hard to swallow” for shareholders of the company.

Let me tell you about one such investment.

BP have a 20% holding in a state controlled Russian company called Rosneft. This company is undertaking one of the biggest oil projects in history. So what, that is surely what BP do – invest in oil amongst other things.

Yep, but why does the company include the money earned from this project in its annual financial performance, which is out this week, but fails to include Rosneft’s emissions in its climate aims?  

I wonder if this huge project based in the pristine, northernmost tip of the Siberian Artic, is just too lucrative to bail out of yet, despite its dirty black, rather than green credentials?  

Now, when I say that this is a huge project, by George, I mean huge!

The project, whose committee is chaired by former German chancellor Gerhard Schroder, is worth $134 billion and has required two new airports, a new port, a 480-mile-long pipeline and 15 new towns to support the 400,000 workers.

This raises the concern that BP’s ambitions to cut their carbon footprint, only covers their own output, not Rosneft’s or oil that is traded.

Rosneft pumped out about 2.1 billion barrels of oil and gas in 2019, putting BP’s share at more than 400 million barrels. You might begin to see why they are reluctant to cut themselves free from such a lucrative business.

I am not the only one asking if BP’s statement of “net zero by 2050 or sooner” simply means that they have three decades to make a decision on Rosneft?