On a wider and longer-term basis, lower oil prices have been welcome, Bernard Looney, Chief executive, Upstream at BP said during the International Petroleum Week in London.
Firstly, it has been good for billions of consumers, he said, adding that affordable energy lifts people from poverty and stimulates economies.
“However, I think this change has also been very good for our industry. It has forced us to confront inflation and waste. Those issues were obscured in a $100 world, but they were brutally exposed in a $50 one,” said Looney. “We face a choice between evolution and irrelevance – and we are evolving. We have embedded new levels of capital discipline in projects and new levels of efficiency in operations. We have not just applied new technology, but the newest technology, and not just from our industry.”
Regarding the low carbon transition, he said there is no denying this is a challenge, commercially.
“Gas will take market share from coal. But wind and solar will take share from gas. Electric vehicles will take share from conventional ones. And biofuels will take share from crude. But the big picture is a sustainable environment. This is something for everyone to support,” added Looney.
And what is more, the oil industry needs to be part of the world’s strategy for sustainable energy development, he said.
“We are not talking about an overnight switch from traditional fuels to renewables. We are looking at a gradual transition to a lower-carbon mix over several decades,” Looney explained.
He pointed out that oil and gas will be used in a highly efficient way.
“Oil will be used in advanced engines and hybrid cars. And gas will help reduce emissions. That’s what happens when it is used to replace coal in a power plant or as LNG in a ship or truck. It will also be used in tandem with renewables to provide power,” said Looney.
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