BP Plc plans to invest $500 million a year on low-carbon energy, which presents a growing challenge to its traditional oil business.
The U.K.-based oil producer sees “significant commercial potential” in solar power and is becoming more active in trading carbon credits, deputy chief executive officer Lamar McKay said in London. It also plans to set targets for emissions from operations, he said.
In December, BP re-entered the solar market after a six-year absence with a $200 million investment in a company that develops photovoltaic farms in Europe. The move followed recent forays by peers Royal Dutch Shell Plc and Total SA into offshore wind and solar-panel production as Big Oil prepares for a future the could be dominated by clean energy.
BP’s investment plan is less ambitious than rival Shell, which pledged to spend as much as $2 billion a year on its new energies business. The British company is “scanning and screening” for renewables deals, CEO Bob Dudley said in an interview last month. It must “get its balance sheet really strong, and then we’ll be able to do whatever we think is the right thing to do,” he said then.
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