Production of natural gas in liquid form by bp is about 0.1 million barrels of oil equivalent per day. It intends to double output by 2030.
Output of natural gas is over 5,000 million cubic feet per day. For comparison, the UK consumes about 7,700 Cub ft/day. Bp obtains its gas from a wide geographical area – see table.
Sources of gas
2021 UK US Canada S America Africa Asia Aust
Natural gas liquids produced (thousands of barrels of oil equivalent per day) 5 70 0 4 7 2
Natural gas (millions of cubic feet per day) 236 1,197 2 1,260 1,332 1,279 0
Examples of activity:
The managers of bp plan to invest in “transition growth businesses” (the green stuff) up to 40% of total capex by 2025 (to around $5bn), and to 50% by 2030. This is an increase from about $2 - $3bn today. A large part of that will be wind power. The company is planning to have 50GW of renewable generating capacity by 2050, and “remains confident of achieving 8-10% levered returns for those investments” (bp Update on Strategic Progress 8 Feb 2022)
Renewables (wind, solar, hydrogen, bio-fuels) statistics
2020 2021Feb 2022
Renewables installed in year, GW (1 GW supplies electricity for roughly 1m homes) 1.5 1.9
Developed renewables (solar + wind) to FID, final investment decision, GW 3.3 4.4
Renewables pipeline America, GW 6.3 16.2
Renewables pipeline Asia Pacific 0.8 1.4
Renewables pipeline Europe 3.7 5.3
Renewables pipeline Other 0.1 0.2
Pipeline by technology
- Offshore wind 2.2 3.75.2
- Solar 8.7 19.4 To put the numbers into context, the UK generates 21% of its electricity offshore, enough to power 10.8m homes (about 10 GW).
One rotation of an off-shore wind turbine will power a home for a day.
The UK Government intends to greatly increase wind power to 50GW, and bp are well placed to supply a good proportion of that power.
Over the last five years there has been a 65% reduction in capital costs for offshore wind.
The bp-EnBW partnership in 2020 was awarded 3GW (1.5GW net to bp) in the Irish Sea for 60 years (Morgan and Mona)
East Coast of Scotland
Awarded 2.9GW in 2020
United States offshore
In 2020 bp teamed up with Equinor to develop offshore wind projects with four assets in two existing leases on the US East coast. Bp invested $1.1bn for a 50% share in Empire Wind lease (2GW) and Beacon Wind (2.4GW). The JV signed a 25 year purchase and sale agreement with NY State Energy to take 2.5GW of the power
Leases were won in the 2022 round of auctions by the bp-EnBW JV for a fixed foundation site 60km off Aberdeen, to generate 2.9GW (The Marven project). Aberdeen is to become bp’s global operations and maintenance centre of excellence for offshore wind. Investments include infrastructure ports, harbours and shipyards, including four ships to support EnBW-bp’s wind projects across the UK.
Marubeni/bp partnership for offshore wind, with bp buying a 49% stake in the proposed project. Other projects could follow as Japan was targeting 10GW of offshore wind by 2030 and 30-45 by 2040 – these might be increased after Ukraine-Russian war.
The next newsletter looks at bp's other green businesses
I'm a full-time investor running my portfolio. I invest other people's money into the same shares I hold under the Managed Portfolio Service at Henry Spain. Each of my client's individual accounts is invested in roughly the same proportions as my "Model Portfolio" for which we charge 1.2% + VAT per year. If you would like to join us contact Jackie.Tran@henryspain.co.uk
investing is about making the right decisions, not many decisions.