BP announces corporate restructuring amid bid to lead climate change efforts.
February 2020 marked an important step in BP’s recent history. Bernard Looney took over as BP CEO from Bob Dudley and the company announced fundamental changes in its strategic goals and internal structure.
BP’s corporate motto (“Beyond Petroleum”) had the same initials as the company’s name and referred to alternative energy sources. It has now been replaced on the company’s web site by the “Reimagining Energy” slogan, stressing the need to re-think the role of the energy industry in modern society.
According to the newly appointed CEO, the company is determined to become an industry leader in combatting climate change.
BP’s plans are ambitious – to become a net zero emissions company by 2050, cut 50% of its products’ carbon intensity by 2050 and increase the proportion of investment into non-oil and gas businesses over time.
Moreover, it has become the first IOC to declare a goal of facilitating humanity’s transition to a low-carbon economy. Several new divisions will be created in the company’s structure specifically for this purpose. For example, a Regions, Cities and Solutions division will develop a strategy of transition to the low carbon economy while a Communication and Advocacy division will promote sustainability values across the globe.
BP’s overall organizational structure will undergo substantial changes. The division into Upstream and Downstream will be eliminated. All production assets will be consolidated into the Production and Operations business segment (or “Business Group,” in BP terms). At the same time, new business segments for Gas and Low Carbon Energy operations, Innovation & Engineering, Customers and Products management will be created.
Apart from these four business groups, another four supporting segments (“enablers”) and three functional segments (“integrators”) will be created. The heads of these 11 segments will constitute the corporate top management team.
Observers note that the success of the newly adopted strategy will depend largely on its implementation by the management team. They cite the fact that former head of the Alternative Energy division, Mr. Dev Sanjal, was put in charge of newly created Gas and Low Carbon Energy business group as a positive example.
The detailed new corporate strategy will be presented to stakeholders in September 2020.
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