Surging hydrocarbon prices have BP boss Bernard Looney calling for more investment in diversified fuels, longer-term energy contracts and storage in order to build a robust energy economy for the future. As the price of conventional energy sources spike, the increase is placing inflationary pressures on utilities across the globe. The pressures on infrastructure already strained by the global COVID-19 pandemic throws the timing of a potential global recovery into question.
“I think the real question is not about how it looks today because, in general, things are being supplied today, I think the question is what would it look like as we head into the winter months," said Looney at CERAWeek’s India Energy Forum. “People are doing what they can to get ready for that, but I think what it means in the longer term ... we must invest into things like longer-term contracts, invest into natural gas which remains a great balancer in the system, invest into storage and invest into diversification.”
Looney added that some countries are already topping up energy storage to avoid shortages during winter, according to Reuters.
Earlier this week, BP signed a 10-year piped natural gas supply deal with a unit of China's Shenzhen Gas Group Co. Ltd. starting 2023. BP also aims to supply 15% of India’s gas needs, Looney said.
Looney was not the only party at the India Energy Forum calling for additional investment. Abu Dhabi National Oil Company (ADNOC) Chief Executive Sultan al-Jaber told attendees that more investment is needed in the sector to avoid another energy supply crunch.
India is the world’s third-biggest oil consumer and importer, and its oil minster Hardeep Singh Puri echoed Jaber’s comments.
“Yes, a wake-up call. That there is not enough investment. In addition to that is also the fact that the transition to green energy is also imposing a cost,” he said.
During the same event last year, Looney confirmed BP’s transition from an international oil company to an integrated energy company.
“Who knows what the future really holds,” he said. “We have to take into our own hands what we control, and what we control is the cost, the capital, productivity, the emissions, and the quality of that business. That’s why we are going to focus it so it can become that engine that fuels the diversification of BP over the next decade.”
Included in that is the goal to reduce the company’s hydrocarbon production by 40% over the next decade. The reduction is a sure way to impact overall emissions volumes. BP also aims to favor a value over volume proposition when it comes to new hydrocarbon investments. Looney said in late 2020 the company plans $9 billion in investment in its upstream business over the next decade.
