Two decades ago, BP dropped the ‘British’ from its name and re-branded itself as Beyond Petroleum, in a multi-million pound marketing exercise.
The word ‘British’ may then have seemed redolent of a bygone era in the company’s history, with unwelcome imperialist associations.
But the name change also reflected the company’s dwindling presence in its home country and in the North Sea, where it had once been a huge player.
Facelift: BP’s name change back in 2000 reflected the company’s dwindling presence in its home country and in the North Sea (pictured), where it had once been a huge player
By the early years of this century, BP’s bosses were more interested in other markets, including Russia, where the company eventually acquired a 20 per cent stake in Kremlin-backed oil giant Rosneft.
Times have changed. What once looked like a lucrative, if risky, Russian investment now resembles an albatross. BP has promised to sever ties with Rosneft, though it is not clear how this will be achieved.
The big return to Britain pre-dates the invasion of Ukraine and is driven by the desire to become a clean energy player, rather than a response to the war.
Recent events, though, can only serve to underline the importance of reducing dependence on fossil fuels, and the likes of Putin, for our energy.
Having once viewed the UK as a sunset market, BP is planning to invest £10billion into windpower, hydrogen and other green energy ventures. Its familiar petrol station forecourts will host tens of thousands of electric vehicle charging points.
Bernard Looney, the chief executive, has vowed to invest £2 this decade for every £1 the company makes in the UK.
‘We are a UK company and we are betting on Britain,’ says Louise Kingham, head of BP’s UK business. ‘We want to showcase low carbon in the UK because it is our home and from an economic point of view, in terms of creating value.’
It will, she says, create hundreds if not thousands of jobs, directly and in the supply chain.
Britain will act as the test bed for BP’s ambition to reinvent itself as a net zero company. ‘There are two things to be done given the awful world events we are seeing unfold,’ says Kingham.
‘One is to recognise the value and the place of oil and gas in the transition [to clean energy], to look for the most resilient, high value and cleanest oil and gas that you can. The next thing is to double down on the transition. We are really up against it in terms of time.’
The pivot back to Britain is part of a major change in strategy and much depends on the results.
Along with other oil majors, BP has come in for intense criticism from environmental, social and governance campaigners, accusing it of ‘greenwashing’.
In their eyes, BP remains the problem, not part of the solution.
It struggled to recover from the Deepwater Horizon oil spill more than a decade ago, which cost the company billions and took years to resolve.
The stake in Rosneft is likely to prove a lingering thorn in the side. Having said it is ending its relationship with the Russian business, it is likely to struggle to find a buyer and may have to write off the entire value. The hit could be as much as $25billion.
Vow: BP chief executive Bernard Looney has pledged to invest £2 this decade for every £1 the company makes in the UK
BP shares, which have performed disappointingly over the long term, are actually up 13 per cent in the past year.
The company has also come under fire for making hefty profits at a time when families are struggling with energy bills, and there are vocal calls for a windfall tax in the forthcoming Budget.
Its move to invest more in the green energy transition here in Britain is part of one of the biggest corporate re-inventions ever attempted.
BP has been headquartered in the UK since it first listed its shares in London in 1909 as the Anglo-Persian Oil Company. Until recently, though, its British operations had been shrinking.
The company’s dominant position in the North Sea, where it made the first commercial discovery in the UK sector with the West Sole gas field in 1965, has dramatically diminished.
Betting on Britain: Head of BP’s UK business Louise Kingham
The giant Forties field, which started producing oil in the mid- 1970s, was sold to Apache of the US.
By the late 2010s, BP did not have a single refinery or chemical plant in Britain and its North Sea operations had shrunk to just six key fields.
The most visible remainder of its once mighty presence were the 1,200 service stations.
But it believes there is still money to be made off the coast of these islands, albeit above the waves rather than deep below.
The glory days of oil may be over, but BP sees the UK as one of the largest and most attractive offshore wind markets in the world.
And its plans could play a part in the Government’s levelling up agenda. It has its sights set on Teesside, the former centre of the steel industry and one of the poorest regions in the UK following the decline of manufacturing.
BP is working closely with local politicians including Tees Valley mayor Ben Houchen on creating a green energy powerhouse.
The region will be the site for several of its most significant projects, including a huge carbon capture partnership, Northern Endurance – the name of the aquifer where the CO2 will be stored.
The plan is for a power station to use natural gas, capture the CO2 emissions then send them to Northern Endurance. Kingham describes it as a ‘world first’.
‘If we can demonstrate it works in practice on Teesside, then maybe we can export that expertise,’ she says.
BP’s plans on Teesside also include two major hydrogen projects, one green, where the gas is produced by splitting water into hydrogen and oxygen using renewable electricity and one blue, where hydrogen is produced using natural gas.
In Aberdeen, the historic centre of the UK’s oil and gas operations, the company is a preferred bidder to help the development of a hydrogen hub and is working on a plan to decarbonise the harbour.
Although BP is not the force it once was in the North Sea, it still has a presence and is trying to make its operations greener.
Since 2015 it claims to have removed the equivalent of 400,000 tonnes of carbon dioxide from its operating emissions.
Looney and Kingham will have to work hard to convince BP’s many critics, and indeed many long-suffering investors.
Their big bet on Britain matters to all of us, as millions of people in the UK rely on dividends from the oil major to flow into our pensions and savings plans.
But whatever the outcome, as Kingham says: ‘You will see a very different BP by 2030.’
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