BP (BP.L) is in talks with electric vehicle makers on partnering to offer battery re-charging docks at its global network of fuel service stations as it seeks to benefit from the move away from diesel and petrol cars, Chief Executive Bob Dudley told Reuters on Tuesday.
FILE PHOTO: A general view of a new BP petrol station on the outskirts of Mexico City, Mexico, March 9, 2017.
The expected rapid growth in the use of electric vehicles in the coming decades is threatening oil companies’ business model as demand for some road fuels could plateau as early as the late 2020s, according to some oil company estimates.
Looking to take a slice of the growing market, London-based BP is however examining different ways to get involved in the sector.
“We have discussions going on with a lot of the EV manufacturers to have a tie-up with our retail network for charging,” Dudley said in an interview.
Rival Royal Dutch Shell (RDSa.L) has already launched a pilot scheme to install battery charging docks at a few of its service stations in Britain and the Netherlands.
The number of electric vehicles on roads is forecast to grow significantly in the coming decades, particularly in cities, with BP estimating that there will be 100 million by 2035, up from 1.2 million in 2015.
Dudley has been a vocal advocate of the oil and gas industry’s need to take part in the move away from fossil fuels toward using cleaner sources of energy in order to combat global warming.
But BP, along with rivals including Shell have yet to come up with a clear plan for increasing their interests in renewable energy production such as solar and wind.
“We’ll be ready for this world but we’re not going to dive in too deeply,” he said, referring to BP’s previously unsuccessful ventures into renewable energy, including solar power.
BP will make investments in future technologies but these will be small percentage stakes in companies or partnering with them, he said.
Dudley said BP was also studying autonomous vehicles and the potential for combining natural gas with solar power generation.
Oil companies are also using venture capital funds to invest in new energy technologies. Shell, for example, announced on Tuesday an investment in a Singapore-based solar firm Sunseap Group.
Pivotal Year
This year is shaping up to be pivotal for BP as it starts up the largest number of new projects in a single year and the huge series of payments made in penalties and compensation for the deadly 2010 Deepwater Horizon rig explosion in the Gulf of Mexico taper off.
BP’s shares rose by more than 3 percent on Tuesday to trade around 459 pence after the company reported a 10 percent rise in oil and gas production in the second quarter. The company aims to add 800,000 barrels per day of new production by the end of the decade.
Dudley said that the company will remain focused on reining in spending in order to make the company profitable in “a new normal” of a $50 a barrel oil price and aimed to reduce its operating breakeven cost to $30 a barrel in order to make it resilient.
BP’s first American CEO also said BP could not identify at the moment any attractive opportunities in the U.S. shale industry, where it has a smaller production interest compared with Exxon Mobil(XOM.N), Chevron (CVX.N) and Shell.
“We scan and screen ops all the time and people offer things to us. They just appear expensive,” Dudley said. Meanwhile, however, BP is one of several major companies developing shale gas prospects in Argentina’s Vaca Muerta province.
He also denied a recent media report that said BP was thinking of putting its entire North Sea business up for sale.
“That is absolutely incorrect, we are deeply committed to the North Sea, it is one of our heartlands,” he said.
Source: Reuters