BP targets global leadership in hydrogen as it reports record profits

BP has followed current energy company trends in achieving record profits for 2022, reporting a figure of $28 billion. 

In 2022, it delivered EBITDA of $61 billion, operating cash flow of $41 billion. It reported a continued strengthening of its finances, reducing net debt by $9.2 billion over the year to $21.4 billion.

BP’s chief executive Bernard Looney said: “It’s clearer than ever after the past three years that the world wants and needs energy that is secure and affordable as well as lower carbon – all three together, what’s known as the energy trilemma. To tackle that, action is needed to accelerate the transition. And – at the same time – action is needed to make sure that the transition is orderly, so that affordable energy keeps flowing where it’s needed today.

“As an integrated energy company, BP is very deliberately set up to help on both counts.”

Looney said the company would increase its focus on the transition growth engines able to deliver nearer-term solutions – like EV chargers – that can help people and businesses decarbonise sooner. He also said the company would continue to build its hydrogen and renewables and power businesses for the longer term, based around projects where BP’s integrated approach can create significant additional value.”

After setting out its new purpose, net zero ambition, structure and strategy in 2020, BP’s focus is now on delivering its transformation into an integrated energy company. Looney said: “Throughout 2022, BP continued to focus on delivery of our integrated energy company strategy. We are helping provide the energy the world needs today and – at the same time – investing with discipline into our transition and the energy transition…”

BP said it expects to achieve returns of greater than 15% from bioenergy, and from convenience and EV charging combined, and double-digit returns from hydrogen.

Convenience and EV charging: expansion of BP’s strategic convenience site networks is expected to drive growth in the company’s convenience gross margin by around 10% a year to 2030. Together with EV charging they are expected to help grow BP’s ability to offer lower carbon transport solutions for customers. Today BP has 22,000 EV charge points and aims for more than 100,000 by 2030 - around 90% rapid or ultra-fast. It is developing leading positions in key geographies worldwide, underpinned by partnerships with major fleet operators.

Hydrogen and renewables & power: through this decade BP aims to establish the foundations of a material business for the future; it aims to build a leading position globally in hydrogen, initially supplying its own refineries, scaling up to meet growing customer demand and in parallel, as markets develop, developing global export hubs for hydrogen and its derivatives. By 2030 BP aims to produce between 0.5-0.7 million tonnes a year of primarily green hydrogen, also pursuing selected blue hydrogen opportunities.

In renewables & power, BP will focus investment on opportunities where it can create integration value and enhance returns. BP aims to build a portfolio – including a global position in offshore wind - in support of green hydrogen, e-fuels, EV charging and power trading, together with continued growth in its self-funded solar joint venture Lightsource BP.  

Looney said: “We need continuing near-term investment into today’s energy system – which depends on oil and gas – to meet today’s demands and to make sure the transition is an orderly one. We have high-quality options throughout our portfolio, allowing us to choose only the best. We will prioritise projects where we can deliver quickly, at low cost, using our existing infrastructure, allowing us to minimise additional emissions and maximise both value and our contribution to energy security and affordability.”