BP Reshapes Portfolio to Ensure Oil Assets Aren't Left Undrilled

(Bloomberg) -- BP Plc is looking to a future beyond oil as it concedes some crude will be left in the ground.

“Not every barrel of oil in the world will get produced,” Bernard Looney, head of the company’s upstream division, said Tuesday. “We’re facing competition from alternative sources of energy like we’ve never had before.”

The world’s energy giants face mounting pressure from investors and environmental activists who deem fossil-fuel growth risky as governments tighten climate regulations and renewable sources proliferate. For BP and many of its peers, the prospect of waning demand for crude has prompted an increased focus on natural gas as a bridge toward a cleaner energy future.

Gas will be “the fastest-growing hydrocarbon in the world over the next 20 to 30 years,” Looney said at a conference in Florence, Italy. “So you’ll see us shifting and growing our gas position,” among other businesses. BP on Tuesday also announced an investment in electric-car charging company FreeWire.

The comments from the upstream chief expand on a warning from BP a year ago, when it said oil supplies will remain abundant in the coming decades and demand may peak in the mid-2040s. Nevertheless, its Chief Economist Spencer Dale in May rejected the notion that the company itself will be left holding assets it can’t drill. Looney’s remarks on Tuesday didn’t repeat that certainty.

“We have more oil than the world needs,” he said. “The change is structural. The change is here to stay and competitiveness is, in our view at least, the way forward."

To contact the reporter on this story: Kelly Gilblom in Florence at kgilblom@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Amanda Jordan, Dylan Griffiths

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