BP PLC (LSE:BP.) has unveiled what is described as ambitious plans for fresh investment in the UK North Sea, including spending on exploration in the vicinity of the oil major’s existing production hubs.
The oil and gas pledge is part of an US$18bn investment package outlined by BP – which today announced over US$8bn of first-quarter cashflow and US$6bn of underlying profit - and also includes projects in offshore wind, electric vehicle charging networks, hydrogen fuels, and carbon capture technologies.
Investments are tied into BP’s ‘net zero’ goals and cover proposals over the rest of this decade.
BP said it will develop “lower emission oil and gas projects” to support Britain’s security of supply and specifically mentioned the Murlach, Kate and Mungo fields in the Central North Sea, along with the Clair and Schiehallion fields in the West of Shetland region.
Electrification of certain offshore operations is also part of the plan to reduce BP’s carbon footprint in the North Sea.
On the same day that BP’s quarterly results sparked fresh calls for a windfall tax on oil and gas producers, amidst soaring fuel prices, the oil major said it expects to pay £1bn in UK taxes on its North Sea profits, on top of £250mln of usual annual taxes, and said it has significant operating spend in the UK which prior to the pandemic accounted for some 0.5% of UK GDP.
“We’re backing Britain,” BP chief executive Bernard Looney said in a statement. “It’s been our home for over 110 years, and we’ve been investing in North Sea oil and gas for more than 50 years.
“We’re fully committed to the UK’s energy transition – providing reliable home-grown energy and, at the same time, focusing on the drive to net zero. And we have ambitious plans to do more and to go faster.
“Our plans go beyond just infrastructure - they see us supporting the economy, skills development and job opportunities in the communities where we operate. We are all in.”
Renewables and carbon reduction
The renewables side of the investment package includes previously announced offshore projects in the Irish Sea for a potential 3 gigawatts of generating capacity and offshore Scotland a lease option for a project that’s not yet confirmed (BP is presently designated the ‘preferred bidder’).
It also includes shore side investments in ports, harbours and shipyards to support the roll-out of offshore wind projects plus job creation and training efforts in wind power.
BP has pledged £1bn of investment in the UK’s EV charging infrastructure over the next ten years, potentially tripling the number of charging points with the expansion tied-in to consumer demand.
In hydrogen, BP plans two large-scale hydrogen production facilities in the UK, both in Teeside, one of which will be ‘blue’ hydrogen (produced using natural gas) and the other will be ‘green’ (producing from water using electrolysis).
Altogether, BP targets 1.5 gigawatts worth of hydrogen by the end of the decade which would account for some 15% of the UK’s 10GW target.
The company is part of the ECC (the East Coast Cluster) venture – inclusive of areas around Middlesbrough, Hull, Scunthorpe and Grimsby - which seeks to develop carbon capture projects equating to 50% of all of the UK’s carbon dioxide emissions, and includes a plan for the ‘world’s first’ gas fired power station incorporating carbon capture.