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BP calls for investment in long-term energy deals, storage to meet future demand

Global energy major BP BP.L called on Thursday for more investments in longer term energy contracts, storage and the diversification into various fuels to build a robust energy system in future.

The call comes after coal, oil and gas prices surged to all-time or multi-year highs in recent weeks hammering utilities and consumers from Europe to China, raising inflationary pressures and putting at risk a global recovery from the COVID-19 pandemic.

Globally buyers and consumers are advocating for higher investment in energy assets for continued and affordable supplies.

“I think the real question is not about how it looks today because, in general, things are being supplied today, I think the question is what would it look like as we head into the winter months,” BP Chief Executive Bernard Looney said at the Indian Energy Forum.

“People are doing what they can to get ready for that but I think what it means in the longer term…we must invest into things like longer term contracts, invest into natural gas which remains a great balancer in the system, invest into storage and invest into diversification.”

Some countries are already topping up energy storage to avoid shortages during winter, Looney said.

On Wednesday, BP signed a 10-year piped natural gas supply deal with a unit of China’s Shenzhen Gas Group Co Ltd starting 2023.

BP also aims to supply 15% of India’s gas needs, Looney said.

Separately, BP wants to strengthen its energy-trading operation, one of the world’s largest, which will benefit from the company’s new focus on generating electricity.

“We intend to double down on and grow, particularly here in Europe, particularly in China and looking at the United States,” Looney said referring to BP’s electricity business.

Earlier this month, small British energy supplier Pure Planet, in which BP holds a stake of about 24%, ceased trading as many suppliers struggled with record wholesale energy prices.
Source: Reuters (Reporting by Nidhi Verma; Editing by Emelia Sithole-Matarise)

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