bp announced a new strategy to reshape its business, including plans to invest $5 billion a year over the next decade into low-carbon energy, while cutting its gas and oil production by about 40% during the same period.

Within 10 years, bp aims to have increased its annual low carbon investment 10-fold to around $5 billion a year, building out an integrated portfolio of low carbon technologies, including renewables, bioenergy and early positions in hydrogen and CCUS. By 2030, bp aims to have developed around 50GW of net renewable generating capacity — a 20-fold increase from 2019 — and to have doubled its consumer interactions to 20 million a day.

Over the same period, bp’s oil and gas production is expected to reduce by at least one million barrels of oil equivalent a day, or 40%, from 2019 levels. Its remaining hydrocarbon portfolio is expected to be more cost and carbon resilient.

By 2030, bp aims for emissions from its operations and those associated with the carbon in its upstream oil and gas production (addressed by Aim 1 and Aim 2 of bp’s net zero ambition) to be lower by 30-35% and 35-40% respectively.

bp also set out a new financial frame to support a fundamental shift in how it allocates capital, toward low carbon and other energy transition activities. The combination of strategy and financial frame is designed to provide a coherent and compelling investor proposition — introducing a balance between committed distributions, profitable growth and sustainable value — and create long-term value for bp’s stakeholders.

As part of the investor proposition, bp’s board has introduced a new distribution policy, with two elements:

• the dividend reset to a resilient level of 5.25 cents per share per quarter, and intended to remain fixed at this level, subject to the board’s decision each quarter, supplemented by
• a commitment to return at least 60% of surplus cash to shareholders through share buybacks, once bp’s balance sheet has been deleveraged and subject to maintaining a strong investment grade credit rating.

The company also plans to increase the number of electric-vehicle charging points it offers from 7,500 to more than 70,000 by 2039.

“Energy markets are fundamentally changing, shifting towards low carbon, driven by societal expectations, technology and changes in consumer preferences,” said bp chairman Helge Lund. “And in these transforming markets, bp can compete and create value, based on our skills, experience and relationships. We are confident that the decisions we have taken and the strategy we are setting out today are right for bp, for our shareholders, and for wider society.”

The company plans to share more details on its strategy, business plans and investor proposition in its capital markets day presentations Sept. 14-16.

bp announced its new purpose, net zero ambition and aims, and its determination to reimagine energy and reinvent bp, earlier this year. The strategy sets out how bp expects to deliver its ambition. Overall, it aims to:

• pivot to low carbon energy and customer focus
• focus resilient hydrocarbon business on value
• deliver on net zero ambition
• and deliver long-term value for shareholders

“We believe our new strategy provides a comprehensive and coherent approach to turn our net zero ambition into action,” the company said. “This coming decade is critical for the world in the fight against climate change, and to drive the necessary change in global energy systems will require action from everyone. “