BP Chief Avoids Funding Pledge for CCS

BP CEO Bob Dudley avoided making any funding pledges, when asked this week if the company might invest its own money directly in carbon capture and storage (CCS).

Asked if BP was willing to 'break with the past' and use its technological expertise to invest in CCS now, even if it did not currently appear economic in the short-run, Dudley told an event in London February 20: “BP had four CCS projects at scale [but] we had to step back from them in 2010 after the Gulf of Mexico" [the Macondo disaster].

“Our capital framework has been quite tight now for eight years,” he continued: “We have the expertise in the company. We do do some CCS-type projects, through the injection of CO2 back into [oil] reservoirs. We can do more on this. But it’s simply been that we had to redirect our efforts. I know there are some big projects in Norway. I think the government in the UK is looking at scale projects, we’ll see. That’s probably all I can commit right now,” he added.

Dudley was prompted by BP chief economist Spencer Dale to talk a little about the $1bn Oil & Gas Climate Initiative (OGCI) fund set up late 2016 by ten majors including BP for climate action projects, including CCS.

OGCI was asked by NGW four months ago to detail how much it had invested from the $1bn fund. But it replied only that a concept for a gas-fired power plant coupled to CCS was being studied, and said it was too soon to even say where that might be sited.

Among CCS projects operating today, all relied on government support or funds: Shell's fully operating 'Quest' CCS plant in Alberta, western Canada, has sequestered over 2mn mt of CO2 from high-carbon oil sands production in its first two years of operation, while Statoil has operated CCS at its Sleipner gas field and Snohvit LNG in Norway and also at In Salah gas field onshore Algeria for around a decade. CCS was a mandatory part of the Chevron-led Gorgon LNG development, now operating offshore Australia.

Yet despite proposing CCS schemes over a decade ago in the UK North Sea, including one based on its Miller depleted gas field, BP to date has launched none – although it has been an equity partner alongside Statoil at In Salah.

Speaking February 20 at the London launch of BP's Energy Outlook to 2040, Dudley said: “The Oil & Gas Climate Initiative… has put together a $1bn fund jointly with companies. It will take time for it to invest this wisely and well.”  He said it could look at all kinds of CCS schemes, including ones by cement companies, which he said could reduce CO2 emissions considerably if they adapted their current processes: “So it’s investing in a broad range of things that we are putting our technologies on."

Dudley began the presentation by saying that, in BP’s view, carbon pricing had to become a key element in energy markets “because it provides incentives to both consumers and producers.”