BP the parent company of bpTT has announced major changes in it global business that will have major implications for Trinidad and Tobago.
The company has said it is not going to explore for hydrocarbons in any new jurisdictions. It will, in other words, not look for oil or gas anywhere that it does not already operate.
The company in a significant statement of intent also indicated that it plans, by 2030, to reduce its output of oil and gas by a whopping 40 percent and that it will reduce its Capital Expenditure to between US $9 and $11 billion annually.
The major announcement was made yesterday as the company also revealed a loss of US $16.8 billion for the second quarter of 2020 and slashed its dividend payment by 50 percent for the first since the Deep Horizon disaster in the Gulf of Mexico.
The company had recorded a US $1.8 billion profit for the same period last year.
bp said it is all part of the move to become a net zero carbon emitter and as it transforms the business to ensure sustainability. It is also part of its contribution to the fight against climate change.
bp aid it was setting out a new strategy that will see it pivot from being an international oil company focused on producing resources to an integrated energy company focused on delivering solutions for customers
The three pillars BP identified going forward were low carbon electricity and energy . It plans to build scale in renewables and bioenergy, seek early positions in hydrogen and building out a customer gas portfolio to complement these low carbon energies.
It wants to provide its customers with convenience and mobility by putting them at the heart of what bp does, helping accelerate the global revolution in mobility, redefining the experience of convenience retail, and scaling bp’s presence and fuel sales in growth markets.
The third pillar is resilient and focused hydrocarbons. To achieve this bp promises to maintain ‘an absolute focus on safety and operational reliability, we intend to continue to high-grade the portfolio, resulting in significantly lower and more competitive production and refining throughput.’
But what does this mean for T&T? Well according to bpTT’s Vice President Corporate Operations, Giselle Thompson the company remains committed to its operations in T&T, including maintaining it 2 billion standard cubic feet of natural gas per day which it produces and for which it has contractual arrangements.
She acknowledges that the reduction in Capex means that T&T will have to fight for investment even harder than it did in the past but said the local business is well positioned to attract not just investment in traditional energy but in new energy like renewables.
She admitted that the 2018 announced US$5 billion investment in T&T in five years were for some projects that have not been sanctioned and will have to now face the hurdle of less CAPEX being available.
Thompson pointed to the partnership with Lightsource and Shell to bring the country’s first large scale renewable energy project as an example of what might be possible in the future.
bpTT’s Vice President Corporate Operations said things are changing globally and bp wants to be part of the solution that leads to cleaner energy and has set various targets to reduce emission.
She said the focused will now be on customers rather than managing resources.
Thompson explained that expenditure in oil and gas will be on high performing existing basins and in places like T&T where bp has a significant footprint.
She insisted natural gas remains an important fuel and the company was not turning its back on oil and gas and Trinidad remains well placed in the global portfolio.
There will be job losses as the organisation intends to shed 10,000 employees globally, with the only people ring fenced are those directly involved in the operations. How many will loose their jobs in T&T? Thompson could not give a number as all of that will be worked out by the end of the year.