In the UAE, BP targets value over volumeFebruary 16, 2021
Salem bin Ashoor, BP’s chief representative and general manager in the UAE, talks to The Energy Year about the company’s role in the energy transition and its investment plans in the region. BP has been active in the UAE since the 1930s. Today, Abu Dhabi is an important hub for the company’s provision of integrated energy services.
Tell us about the last year for BP in the UAE.
It was an unusual year in a number of ways. At BP, we changed our strategy. We shifted our strategy to that of an IEC [integrated energy company], which is all about delivering efficient solutions for energy and energy access to customers and consumers, as well as being more agile and dynamic while focusing on the new forms of energy. Although we are maintaining our oil and gas footprint, we are delivering greener energy.
By 2050, or even earlier, we have set our ambition to reduce our emissions to net zero. We have taken steps in this journey. We were the first major energy company to make that commitment and the pandemic has even fast-tracked the implementation of this new strategy. We went through the biggest restructuring in BP’s history this year.
How will this redefine your strategy going forward?
Over the next 10 years, we plan to, firstly, scale up our low-carbon electricity and energy businesses significantly through renewables and bioenergy, hydrogen and CCUS (carbon capture, utilisation and storage). Secondly, we will transform our convenience and mobility offer, accelerating the global revolution and redefining the experience of convenience retail. Lastly, we will focus our valuable oil, gas and refining portfolio to make it more resilient. We will maintain our absolute focus on safety and operational reliability while driving up productivity and lowering our emissions.
As the wave of major projects comes to completion over the next few years, capital intensity will fall. We will continue to high-grade the portfolio while limiting exploration to existing regions. This will result in lower production and refining throughput over time – while increasing our focus on value, not volume.
As for our partnership and business in Abu Dhabi, Abu Dhabi continues to be important to BP. BP’s current net production from Abu Dhabi is around 160,000 bopd from ADNOC Onshore. It is part of our resilient and focused hydrocarbons, which is an important part of our business.
How did the Covid-19 crisis affect BP’s new global strategy?
It was a difficult yet interesting year, but I think we managed to handle it well. Within the region, our new strategy has been received well by our stakeholders. Everybody is looking at what the energy transition means for them. Everyone has accepted that there is an energy transition element for all of us, and we all have to work towards delivering clean and affordable solutions for customers.
Abu Dhabi has always been a few steps ahead in the energy transition. ADNOC has been working on carbon capture at the Al Reyadah facility with huge success, so the UAE government was already ahead of the curve in planning how to go greener, and including nuclear and solar in the energy mix. The leadership really cares about the environment. When everyone started to make the move toward renewables and reducing their CO2 footprint, the UAE could showcase that they were already ahead.
The challenge brought us closer together with our partners, bringing more transparency and clarifying priorities. BP’s number-one priority in the pandemic has been our people’s safety, ensuring their mental and physical health. In addition, we created a more agile style of working by going digital, bringing new technologies that enabled us to tap into different areas of expertise. In my opinion, what gave everyone in the UAE the confidence to navigate through these challenges was assurance from the country’s leadership.
What was the impact on your operations?
We continued our operations. The pandemic has created a volatile and challenging trading environment. In the first half of 2020, Brent crude prices fell by over a third – recovering in the second quarter and supported by OPEC+ production cuts and some recovery in demand.
Despite this, here we have managed to deliver our commitment to ADNOC Onshore and the Bab integrated asset. We are shareholders in ADNOC LNG and they have done a fantastic job; the Covid-19 pandemic has had no negative impact on production in ADNOC LNG so far.
In Oman we announced, together with our partners, first gas at the Ghazeer field and we just agreed to sell a 20% stake in Oman’s Block 61 to PTT Exploration and Production Public Company Limited (PTTEP) for USD 2.6 billion, which marks another significant step in BP’s divestment programme.
And in Iraq, along with our partners, the Basra Oil Company, PetroChina and the State Oil Marketing Organisation, we marked the 10th anniversary of the Rumaila Operating Organisation – a significant milestone in the history of the Rumaila field, which produces around 1.46 million bopd.
What are BP’s investment plans in the region?
Our clear target is building more resilience in our current investment to reach a new level with new forms of energy, as well as looking at carbon capture and how this CO2 can be used. Another thing we are focused on in our new strategy is gas, and how to explore and look for more gas opportunities while we are transforming through this period of energy transition.
On top of these investments, we are committed to enhancing the local expertise through various actions, including our recently launched BP Ventures and BP Launchpad. With these, we bring small companies and new technologies together and start incubating them.
Together with Masdar, and in addition to BP Ventures and Launchpad, we launched the Catalyst, the region’s first clean technology startup accelerator, as part of our contribution to the UAE. This is based in Masdar City.
How has BP contributed to the Emiratisation programme?
In partnership with the Environment Agency – Abu Dhabi, we have been running a successful programme since 2009. We aim to educate the upcoming generation in the UAE about environmental protection.
Moreover, our BP Young Adventurers platform has been ongoing for more than 20 years, building youth leadership through outbound exercises while helping them build their leadership and interpersonal skills. We have students from the UAE, Oman, Saudi Arabia, Iraq and Kuwait.