Extractives sector: Achieving net-zero; what are our competitors doing?

Extractives sector: Achieving net-zero; what are our competitors doing?

- Intelligence

05-10-2021


PGI offers our geopolitical expertise to support organisations operating in either a particular geography or within a sector specific focus. In a four-part series, we explore the risks and challenges facing the extraction sector.

Amid growing pressure to end fossil fuel extraction and achieve net-zero emissions, this final piece monitors target competitors’ activities towards achieving these goals. This includes developments related to the transition to greener energy as well as ESG developments. The monitoring period for this section is one month, from late July to late August, and includes BP and Total to allow for a like-for-like comparison.

TotalEnergies

  • In late July, TotalEnergies announced it will supply e-commerce company Amazon with renewable energy to reduce the environmental impact of its operations. In turn, Amazon will help Total to accelerate digitisation of its operations.
  • Second quarter results published in July highlighted TotalEnergies’ continued growth in its renewables segment.
  • TotalEnergies announced in July that it had taken over the management and operation of approximately 1,500 electric vehicle (EV) charging points in Singapore. The company also manages and expands EV charging points in Paris, Amsterdam, London, and Brussels.
  • In late July, TotalEnergies’ affiliate Total Venezuela confirmed it had divested its minority participation in Petrocedeno SA due to its involvement in “extra-heavy oil development projects in the Orinoco Belt”. TotalEnergies reiterated its commitment to investing only in low-carbon intensity projects.
  • On 26 July, TotalEnergies announced that it had signed an agreement with gas company Air Liquide Group to provide Belgium with 50 GW of renewable energy per year. The energy will come from a wind farm off Belgium’s coast and will save an estimated 270,000 metric tons of CO2 emissions over 15 years.
  • TotalEnergies and French engineering company Technip Energies signed an agreement in late July to jointly develop low-carbon solutions for LNG production and offshore facilities.
  • In July, TotalEnergies renewed its partnership with automotive manufacturer Stellantis for another five years. The supermajor said the partnership will focus on expanding access to electric mobility, including allowing the automotive brands’ access to TotalEnergies network of charging stations in Paris.
Figure 4: Chart comparing TotalEnergies and BP’s online promotion of their sustainability-related developments, including on their websites, Twitter, and LinkedIn accounts during the one-month monitoring period. Source: PGI

BP (like-for-like comparison)

  • In early August, BP announced its second quarter results showing 4 percent growth. This included growth in its solar and offshore segments after buying a 9 GW solar development pipeline in the US, as well as expanding its solar segment Lightsource bp’s presence in Portugal, Spain, Greece, and Australia. The Q2 results also confirmed that BP will bid for offshore wind leases in Scotland and Norway. CEO Bernard Looney said that the company is “making good progress” in implementing its strategy of becoming an integrated energy company.
  • A BP study published in early August showed that the production of green hydrogen and ammonia using renewable energy is feasible at scale in Australia. This supports BP’s belief that West Australia is well positioned for green hydrogen and ammonia production, though it will require heavy infrastructure investment such as in ports, water, and electricity networks.
  • BP announced on 5 August that it had secured Memoranda of Understandings (MoUs) with chemicals manufacturer Venatory and gas distributor Northern Gas Networks for its proposed clean hydrogen production facility in northeast England. The facility aims to produce up to 1 GW of ‘blue’ hydrogen, which is 20 percent of the UK’s hydrogen target, by 2030.
  • BP joined the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping as a strategic partner as of 27 July. The partnership includes collaborating to develop new alternative fuels and low-carbon solutions for the shipping industry.
  • On 29 July, BP published an article on its website announcing it had joined six other major British companies in pledging to accelerate the adoption of EVs across the UK. The other companies forming the EV Fleet Accelerator (EVFA) group included BT, Direct Line Group, Royal Mail, ScottishPower, Severn Trent, and Tesco. The EVFA committed to converting its fleets to electric vehicles by 2030.
  • BP acquired artificial intelligence (AI) energy optimisation company Open Energi in late July. The London-based company optimises the energy use of low-carbon assets to create cost savings.
  • On 22 July, BP confirmed it had established an exclusive consultancy agreement with UK-based renewables consultancy Quaybridge. The partnership will focus on expanding BP’s offshore wind portfolio and its in-house offshore wind knowledge.
  • BP announced on 19 July that it had submitted a bid, alongside partner company EnBV, for a 2.9 GW wind lease in Scotland’s North Sea. It said that the bid aimed not just to develop wind power, but to help accelerate Scotland’s energy transition to allow for clean energy use in new industries.
Figure 5: “Saying vs Doing” heatmap of activity comparing BP and TotalEnergies over a one-month monitoring period. Source: PGI

The above heatmap summarises the developments of BP and TotalEnergies during the one-month monitoring period. It shows that BP has been more active overall in both “saying” and “doing” for its sustainability commitments, but particularly active in “saying”. BP has mainly achieved this through self-published content such as on its Twitter page or website. Both companies announced partnerships focused on facilitating green energy transitions, while neither company announced any recruitment developments to further their respective ESG targets.

The below heatmap breaks this content down further, showing what sustainability area each target company has focused on in its online content. It is clear that TotalEnergies has focused more heavily on promoting its renewable and low-/no-carbon projects compared to BP, who in turn was more focused on promoting electric mobility compared to TotalEnergies


Contact us to discuss how we can help your organisation mitigate operational threats, via: intel@pgitl.com.

Read part one: Extractives sector: How civil unrest impacts physical operations

Read part twoExtractives sector: The regulatory environment outlook in Brazil

Read part three: Extractives sector: The impacts of activist groups

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