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The CEO of BP wishes more than double the market value of the major oil in $ 200 billion within five years, restaurant the company at the level it has reached before the Deepwater Horizon 2010 disaster.
Murray Auchincloss told Financial Times COP would take advantage of the “huge” demand for oil and gas after having abandoned this week a plan to reinvent itself as a green energy company.
“At the end of the decade, it would be good to be back where we were before Macondo,” said Auchincloss, referring to the name of the oil well that exploded, causing one of the worst spills of all time and leaving BP with a cleaning bill of 62.5 billion dollars.
He spoke a day after BP, whose current market value is just under 70 billion pounds sterling (89 billion dollars), reduced his annual expenses for renewable energies by 70% and pivoted back to its oil and basic gas activity.
The plan, which has received a lukewarm reception of the market, is a recognition of BP that the energy transition evolves much more slowly than expected.
“The request for oil and gas will be there for a long time,” said Auchincloss, when asked what BP would look like after 2050. “There will always be huge amounts of demand for that.”
He said that the growing electricity requirements of data are making gas, in particular the fuel of choice. “The challenge is how to decarbonize this kind of thing as much as you can,” he said, adding that BP was already actively capturing carbon emissions.
While Auchincloss has abandoned all the targets for renewable energies and wishes to move the wind and the BP solar arms from the business balance sheet, he said that they would always be “very large” companies.
BP was criticized for having moved too slowly to implement its strategy, but Auchincloss said that he had no regrets about his first year as permanent director general. “Nothing comes to mind,” he said.
“You do not announce a change of strategy before changing it,” he said, adding that if he had announced such a daring pivot before laying the basics, the market would not have believed it.
BP was under pressure to improve its performance, especially after it emerged earlier this month This activist investor Elliott had built a participation close to 5% in the company and put pressure for change.
A person familiar with Elliott’s thought said Thursday that the company’s plans did not go far enough, after calling for large divests and reductions in renewable energy expenditure. Bloomberg first pointed out the dissatisfaction of the hedge fund with regard to the new strategy.
Auchincloss refused to comment if he had had an interaction with the New York based hedge fund.
He recognized that BP would suffer from short -term financial pain by filling his pipeline with petroleum and gas projects after years of cup of his portfolio. But he said that he would focus on promoting the company to American investors and said that the majority of BP growth would come from the United States and the Middle East.
“We are more American than many American companies,” he said.
“I really focus on American investors and I show them how attractive we are compared to their domestic opportunities in the United States,” he said, adding that the management team would speak to more than a third of BP shareholders in roadshows in the coming weeks.
He said, however, that the displacement of the company’s registration in the United States was “not on the agenda”.
Auchincloss also defended BP against criticism that it is less precious, as oil and gas company, than its peers such as Exxonmobil and Chevron, which have stock market capital of $ 481 billion and $ 279 billion respectively.
“Our size is smaller, but the quality of our assets is exceptionally high,” he said before submitting a list of BP oil and gas fields which, according to him, were the desire for industry.
“Upstream is absolutely world class and is the desire of other companies. We have a very, very, very good integrated position which allows trading. And American companies have no trading. They would love it. We go head to head with Shell, which is twice our size [by market capitalisation]. “”
