In response to continued depletion of fossil fuels and growing worries over the effects of climate change, many oil and gas companies have made significant commitments to not only boosting their investments in alternative energy, but also cutting back on oil and gas production.
Recently, however, experts have noticed some shifting priorities in the ranks of the world’s largest oil and gas companies. For example, according to a recent Reuters article by Ron Bousso, oil and gas giant “BP has abandoned a target to cut oil and gas output by 2030 as CEO Murray Auchincloss scales back the firm’s energy transition strategy to regain investor confidence.”
In 2020, BP revealed “the sector’s most ambitious” strategy, promising to “cut output by 40% while rapidly growing renewables by 2030.” However, that lofty goal was scaled back “to a 25% reduction” in February of this year.
Now, the company has signaled that it will instead be “targeting several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output.” This move appears to be motivated by a desire to appease investors who want to stay “focused on near-term returns rather than the energy transition.”
Bousso notes that all the details are not yet known, as “Auchincloss will present his updated strategy, including the removal of the 2030 production target, at an investor day in February, though in practice BP has already abandoned it…It is unclear if BP will provide new production guidance.”
BP isn’t the only oil and gas giant rethinking the future. According to Bousso, “[r]ival Shell has also slowed down its energy transition strategy since CEO Wael Sawan took office in January, selling power and renewable businesses and scaling back projects including offshore wind, biofuels and hydrogen.”
What’s driving this step back from transitioning to alternative energy? Bousso believes “[t]he shift at both companies has come in the wake of a renewed focus on European energy security following the price shock sparked by Russia’s invasion of Ukraine in early 2022.”
While a disappointment to green energy advocates, not every forward-looking plan is being abandoned. Bousso notes that BP “continues to target net zero emissions by 2050.” The company has also “invested billions in new low-carbon businesses” since 2020 and “acquired the remaining 50% in its solar power joint venture Lightsource BP as well as a 50% stake in its Brazilian biofuel business Bunge.”
What does this mean for the oil and gas industry as a whole? There will be no shortage of oil and gas jobs for the foreseeable future. In fact, many oil and gas companies still struggle to hire the skilled workers they desperately need. Moving forward, companies will need to continue to hire skilled workers while also upskilling current workers.
So how do oil and gas companies improve their focus on technical skills? For new and current employees, the answer is technical training. Oil and gas workers need both fundamental knowledge and hands-on technical skills with real industrial equipment they’ll encounter on the job. Be sure to check out Bayport Technical’s wide variety of hands-on oil and gas training systems to take your oil and gas training to the next level!
