BP continues renewable drive

The expansion in new energy was detailed in BP’s second quarter results for 2019, released 30 July, that showed strong financial results with shifts toward renewable energy sources and low-carbon fuel production, despite an increase in gas and oil production since last year. The company now looks to South America to expand its business into the new technologies of renewable energy.

Lightsource BP develops, acquires and manages international large-scale solar projects and smart energy solutions, and this quarter’s expansion of Lightsource BP into Brazil could be the reason for BP’s hesitance to join the bidding for the rights to a potentially lucrative oil field off the coast of South-Eastern Brazil. In a webcast following the morning’s press release, BP’s Chief Executive Bob Dudley and CFO Brian Gilvary gave a brief description of the company’s second quarter financial results, and answered some questions from listeners. When asked whether BP had plans to bid on Brazil’s transfer of rights area following the end of Petrobras’ oil drilling contract off the coast of South-Eastern Brazil, BP’s representatives Dudley and Gilvary were non-committal, stating that the company was still in discussion about whether to join the bidding or not. They claimed that the high cost of bidding on the area was a potential disincentive. Their continued growth throughout Brazil’s emerging solar industry likely provides another disincentive to bid on the contract, which could be an expensive investment into an area where they already have investments in innovative renewable technology, a newer market that may be more profitable in the long-term. Lightsource BP recently announced an acquisition of “approximately two Gigawatts of greenfield solar projects” across Brazil, in cooperation with Enerlife, a developer of renewable energy resources. BP intends to establish itself as a major player in the emerging solar energy market through Lightsource BP, potentially marking the beginning of a shift in the company’s business priorities.

BP’s report also announced a $30 m investment in Calysta, a multinational biotech firm who uses microorganisms to convert methane (a by-product of BP’s natural gas production, and a contributor to greenhouse gas emissions) into protein for livestock feed as well as fuel and plastic. This was a part of BP’s plans to invest in agriculture businesses to decrease and repurpose the carbon emissions from their oil and gas production. Another example was BP’s recent investment in the agriculture developer and food producer Bunge, a story reported here.

The report identified a four per cent increase in gas and oil output from the previous year, as well as growth in their downstream lubricant and fuel marketing. This growth in natural gas and fossil fuel production comes in contrast to some of BP’s stated plans to embrace the coming energy transition to renewable sources.

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