bp started on Monday the so-called bp Week, series of capital markets presentations over the next three days promoting its transformation from an international oil company (IOC) to an integrated energy company (IEC).
CEO Bernard Looney said the company’s “bold and ambitious” strategy was “realistic.” For the past 111 years bp’s main focus was on the production of energy resources, and now the company is refocusing “to deliver solutions to customers” in the energy transition.
He said that as part of its transformation, the company wants to help Houston and Aberdeen with their own decarbonization targets and paths to net zero. The bp week 2020 will aim “to earn your confidence,” the CEO said in opening remarks.
During the inaugural webcast, group chief economist, Spencer Dale, released the Energy Outlook 2020. The annual report is usually published in February, but this year it was delayed to coincide with bp’s plans to give investors and the industry a better insight into its new low-carbon strategy, Kallanish Energy notes.
Dale noted that the three-scenario outlook aims to answer eight main questions regarding the future of the global energy system, which will be characterized by “customer choice instead of fuel availability.”
“In all three scenarios, global energy demand grows, driven by increasing prosperity and living standards in the emerging world,” he said. Another common forecast is that the energy system will see a more diverse energy mix, with hydrocarbons declining and renewables rising in all the scenarios, “as the world increasingly electrifies.”
The scale of the shift varies significantly across the scenarios, with the share of hydrocarbons in primary energy declining from around 85% in 2018 to between 20-65% by 2050 and renewable energy rising to 20-60%.
Oil demand will fall in all the forecast scenarios over the next 30 years. Dale said that the pandemic brought forward peak demand for oil. Consumption of oil “never fully recovers from the fall caused by Covid-19,” mainly driven by the increasing efficiency and electrification of road transportation.
“In all three scenarios the use of oil in transport peaks in the mid- to late-2020s,” he said. “But gas is more resilient and the outlook is helped by broad-based demand and the increasing availability of global supplies.”
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