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AI will trigger global surge in gas demand, says BP boss

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As part of Tuesday’s update, BP announced an accelerated share buyback programme as Mr Auchincloss tries to win over shareholders.

It comes after BP was targeted by activist investor Bluebell Capital last month, which called for the business to scrap “irrational” net zero commitments championed by former chief Bernard Looney.

The company’s latest annual report shows that its commitment to oil remains as strong as ever, with production surging by 8.6pc in the last quarter of 2023 to 1.4 million barrels of oil equivalent per day.

The same trend was evident throughout the year with oil production 6.7pc higher than in 2022.

However, BP now expects production levels to increase further: “Looking ahead, BP expects first quarter 2024 reported upstream production to be higher compared to fourth-quarter 2023.”

The predicted increase is linked to production starting in North Sea fields such as Seagull and Murlach – where tax allowances linked to the windfall levy have encouraged BP to invest.

Mr Auchincloss said BP paid £1.2bn in taxes to the UK Treasury for 2023, with £600m of those coming from windfall levies. 

Multiple drilling projects are also underway in the Gulf of Mexico – a sensitive area for BP following the Deepwater Horizon disaster of 2010 when 11 people died in an explosion.

Last year the company paid out another $1.2bn in oil spill payments.

Mr Auchincloss said: “We think we can increase our oil production by 2-3pc out to 2027. We have a series of investment decisions coming up that could extend those increases to 2030.”

Despite the ramp up in oil production, BP said its renewables and low-carbon businesses were also expanding.

It said: “The renewables pipeline increased by 21.1 gigawatts during the full year, including BP being awarded the rights to develop two North Sea offshore wind projects in Germany (4GW) and an increase in dedicated hydrogen renewables (12.4GW).”

BP also expanded its network of EV charge points by over a third to 29,000 globally, forming a joint venture with energy company Iberdrola to install 5,000 fast chargers in Spain and Portugal and acquiring 3,000 chargers in China

Mr Auchincloss said China was a key target for expansion: “China’s five to 10 years ahead of other EV markets. They’re well ahead on charging and on battery technology and their adoption levels on EVs are enormous – something like 40pc of new cars sold. We’re now number two in that market on EV charging. 

The results mark the end of a turbulent year for BP.

Mr Looney was forced out last September after it emerged that he had conducted multiple relationships with colleagues, of which he had not been “fully transparent” despite requests from BP’s board of directors.

BP’s board said Mr Looney had committed “serious misconduct” which resulted in him forfeiting up to £32.4m in bonuses.

Mr Auchincloss was initially appointed interim chief executive but was confirmed as the permanent successor last month.

His former post as BP’s chief financial officer has since been filled by Kate Thomson, formerly chief finance officer for BP’s production and operations business.

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