There was lot of speculations earlier about the key issues of Exxon Mobil’s planning for future business. Similarly, the future planning of BP Plc also has a lot of key issues. It is mainly based on ignoring the Paris Agreement requirements to decarbonize all the while claiming to actually support the Paris process by BP management.
A recent report by Exxon Mobil, Energy Outlook for 2017, a plan till 2040, clearly explains their business strategy for the future. Here are some views after this report and commentary on the strategy update by BP in February 2017 telling how BP will be getting back to growth.
If looked closely, there is not much information that could be explained about these reports as while they are properly detailed and have a lot of information, both project an intention to increase the gas and oil production of the companies.
BP’s Focus on Their Upstream Business, Which Is the Core of Their Business
BP’s strategy update tells us about a portfolio of strong new upstream projects – about 24 of them over the past five years, six of them beginning production in 2016 and about seven on line in the year 2017 i.e. by the end of 2017 the company would have 500,000 barrels of oil equivalent per day (boe/d). They are also hoping to have 800,000 boe/d production by the year 2020 due to 9 new projects that would be starting from 2018 to 2021.
This states a 5 percent/year increase by 2021 with about 3 million boe/d production for the next ten years. And the expansion won’t be stopping in 2021. Lot many projects are also in the pipeline. Senegal and Mauritania, extension to Atlantis field, Khazzan project of Oman and India gas projects are some examples.
The company is aggressively growing its portfolio by developing new projects. The expansion terms have been discussed till 2030 i.e. for the next decade.
The company is trying to shift to ‘advantaged’ oil and gas in the medium term and the long term is all about a full participation in the transition of energy. BP will be investing more than $200 million on an annual basis for 30 projects that would be new low carbon ventures. This amount is really small to address the problem of decarburization seriously.
To summarize, BP plans to boost production by 800,000 barrels/day by 2020 and continue its growth after that. Exxon Mobil has plans similar to BP planning to increase gas and oil production. Climate change is the most urgent issue addressed in 2016, according to the World Economic Forum. The penalty for not reducing emissions are really stark.