YouSaid · the spoken record

Michaela

lines on the record: 36
first: 2022-07-19
most recent: 2022-07-19
sittings or episodes: 1
sources: podcast

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“Is consistent with the Paris Agreement. Julia was highlighting it before, but our carbonomics analysis, where we've looked at reimagining big oils into big energy, would support the same conclusion that these companies have the key pillars of decarbonization that can make them consistent with the Paris Agreement. So my sense is it's a three-fold drive here towards a re-rating. Cash distribution to shareholders, ongoing capital discipline and buyback, a re-evaluation of the role of natural gas, and finally a rethinking of these companies as greening company consistent with the Paris Agreement.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“I do believe that they are undervalued here. And I think that there will be three key drivers of outperformance here. The first one is the companies themselves taking advantage of the low multiples through buybacks. And some of these companies are currently buying back 5 to 10% of their own shares on an annual basis. Secondly, I think there is a rethinking about natural gas as a green transition fuel and as a key driver of energy security. And this makes up almost half of the business of these companies, which has long duration and which has a key role for society. And then finally, I think that needs to be a reappreciation that although these companies are not green today, there are some of the biggest global investors into green technology and the path of reduction in carbon intensity of the”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“The upside in terms of the resilient hydrocarbons, oil and gas demand, while also exposing you to the growth in terms of that transition plague. So yes, we're active, but I think we need both. And at the end of the day, it's all hands on deck to make this happen.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Need it for the world, and take Tesla. You mentioned Tesla. Tesla in 2021 sold, I think, one million cars, and I think that was double from 2020. It's great. It's 1.5%, 1.4% of global market shares. So you need the Teslas of the world, but you also need the Toyotas and the Volkswagens of the world to actually transition. And if I bring that back to the world of energy, similarly, we need new players and startups, but we need companies such as BP to transition. If I look at it from an investor standpoint to the previous question you asked me, it actually we define this as a greening company or we define ourselves as a greening company. And I think one of the pluses it exposes you.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Basically, it converts residential buildings into virtual power plants so it aggregates energy demand from residential buildings and it gives you the opportunity to then generate and trade that energy. The way they do it is by putting a box in your building. basically real-time measuring of energy consumption. And on the basis of that, they can help you actually optimize that consumption, but also recommend storage, low carbon. And if you link that to our trading activity, you can see how that becomes a virtual power plant. So it's a very interesting company led by an amazing CEO, Robin Beavers. So we're active in that space. I would also say, Alison, that I think for the energy transition to be successful, you need both. You need startups. You need new companies, but you need players such as us to transition. The way I actually see it is”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Our own organization, it's called Launch Pad Adventures, which focuses on venturing, incubation of internal ideas, and then Launchpad is the startup building and accelerator. And I actually have a pleasure of having that organization sitting within my areas of accountability. So if I look at Launchpad, which is a startup builders, we now have seven companies into Launchpad with a potential to build interesting, accelerating transformational opportunities. So to give you an example of one of the companies which I had the pleasure of visiting a few weeks back when I was in New York, this is Blueprint Power. Well, Blueprint Power does is it”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“So, no, you're right, it's an exciting environment. Many startups, many new companies playing a role in particular in the space of mobility and EV, but not only also in Nbrodo energy transition space. We actually in BP have”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Lower carbon intensity, and that's what we're actually aiming for. And I think to add maybe to what you were saying, Michael, in the frame of potential levers to get there, we will have fossil fuels. We will have gas in the system still in 2050, right? Gas has a more resilient profile. Oil, I talked to some of the numbers. We have the technologies, including specifically CCS today, to actually update emissions from industrial use of fossil fuels. So let's not forget this is not a net zero doesn't mean no fossil fuels in the system in 2050. So the question becomes, how do we actually also accelerate those technologies to prepare for that?”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“I fundamentally agree. As you know, we're in action on methane emissions, and if I can react to the point in terms of changing the energy mix, there's a number which I find quite telling, which is if you take India and you project energy demand in India, which is projected to grow exponentially over the next 30 years, if that growth, instead of being actually generated through coal-fired power plants were actually supplied through combined cycle, G gas, you would actually reduce emissions by two gigatons. Now, to give a sense of the order of magnitude we're talking about, the amount of emissions last year in India is approximately the same amount. So it gives you an order of magnitude of the impact that the shift from coal to gas can actually have in terms of optimizing that energy mix. And so I agree with you that the challenge is how do you provide more energy with”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Attempt an answer, and then I'm sure Julia has a lot more to add. I believe as long as we need hydrocarbons from a consumption perspective, and we think that is the case definitely for oil with growth until the middle, if not the end of the decade and for gas growth probably until the end of the next decade, I think the key is to produce them with lower emissions, lower so-called components.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“All hydrocarbons without a distinction of where they sit in terms of the carbon intensity curve. And we believe we need to re-evaluate natural gas as a transition fuel and really turbocharge the growth of liquefied natural gas as a key way to continue to support not only decarbonization in emerging markets where affordable LNG is key to move away faster from coal, but also energy security in Europe and a more rapid move away from Russian gas, which will be impossible and unaffordable unless we start to develop more LNG projects globally.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“The industry is starting to respond. We are starting to see it in short cycle developments which have a payback of two to three years. We're seeing it in US shale. We're seeing it in parts of the Middle East. I think where we're not seeing it yet in the scale we need is in the longer cycle, longer payback oil development and in natural gas. One argument we've always supported is that natural gas is a key green transition fuel. It's needed for the next 10 to 20 years as a minimum to move away as fast as possible from coal and from fuel oil that generate two times the CO2 emission per unit of energy than natural gas. And I think the problem that we've seen until now, especially in Europe, is that there's been a movement against”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“And that number grows through approximately 7 to 8 billion in 2030. And those are transition growth engines, which are likely to grow whichever scenario we're in. We're talking about bioenergy, where if anything, the limitation is going to be supply. We're talking about EV mobility, which is happening twice faster than what we expected even in our net zero scenario a year ago. We're talking about convenience, which for us is related to EV mobility. We're talking about renewables, and I shared some of the numbers in terms of acceleration. And we're talking about hydrogen, which is a critical building block for hard to abate sectors. So the way I look at it is you're exposed to the short-term upside, and you continue to provide oil and gas through an energy system, which today, let's face it, is very reliant on oil and gas. But you're positioning yourself to capture the growth that will inevitably come through the energy transition.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“We developed a cross range of scenarios. And the strategy is very much built on two pillars. On one side, it's continuing to invest on the resilient hydrocarbons piece. And we're talking about 9 to 10 billion in 2025 in terms of investment going to 8 billion in 2030. And we're talking about continuing to prioritize the oil and gas the world needs even more than before today. We have announced that we will be reducing our portfolio by 40% by 2030, but we've also announced that we aim to keep it flat by basically focusing on the best barrels. So to your question, what we are doing is we're focusing on the highest margins, lower carbon, to make sure that the oil and gas we produce on the long-term basis can actually be resilient through the energy transition. At the same time, we are investing in growth. And those transition growth engines, basically $6 billion in 2020.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“And that's a question we get pretty often, as you can imagine. But in the current context, if I look at it, our strategy is a strategy of diversification in the frame of an energy transition, which will happen. We don't know at what pace that energy transition will happen, but it is happening. So it's a strategy of diversification on one side. And secondly, it's a strategy of growth to be exposed to those transition growth sectors and be in a place where we can capture them. Our strategy is set to optimize that and it's not changing given the context that we're navigating today. It is a strategy of growth. We've set an ambition to actually grow a BDA from $37 billion to approximately 41 to 48 by 2030. And yes, high oil prices are actually making it easier to transition, but we didn't develop the strategy assuming higher oil prices as you can imagine.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“But at the same time, as we've discussed in this conversation a few times, oil markets are tight, global energy markets are very tight right now, natural gas prices are skyrocketing. Does it make sense to really stick to these targets? I mean, in other words, is BP doing the right thing but just too early given the current context?”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Operations, production, and sales, and I think we're one of the only one in gas players who has actually net zero aims across the entire supply chain or value chain. And we think they're aligned to Paris. They're based on a line to Paris scenarios. They get to net zero across all the dimensions, and they're based on a corridor of scenarios in terms of 2025 and 2030 interim targets.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“43%, which is referred to, is a global average. Now, what we can't do is take that 43% and bridge it into a specific energy source for an industry. If you look at the breakdown of that number, what you actually start seeing is primary energy consumption from oil is set to decline from 2019 to 2030 by 10%. Primary energy consumption from gas declines again 10% from 2019 to 2030. Primary energy consumption from coal declined by 75% from 2019 to 2030. So what we have done is we've actually looked at the scenarios and pretty granular level and we've extracted the elements which are relevant and pertinent to our asset base because we don't have coal generation assets in our portfolio. And so on that basis we've defined our aims which indeed as you described our net zero cross”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Not only as renewables stand alone, but also renewables integrated into hydrogen. So when we look at renewables as a critical piece of the equation, we're not only looking at renewables with its return, but we're looking at renewables as part of integrated place, be it into EV, be it into traded and power, or be it into hydrogen, which actually changes pretty fundamentally the economics. So, I think what I would say, Alice, in this we've built everything around scenarios, and if you look at scenarios, indeed, the sources that we work with in terms of authoritative scenarios are the IEA and the”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Production for local demand, but increasingly also an international hub play where you're basically going to look for where's my cheapest resource? And that could be Australia, Middle East, countries in Africa such as Mauritania. And then obviously the challenge that we need to crack is how do we effectively transport it to the demand centers in Europe and Asia? But yes, we see it playing a critical role. And I think, as you mentioned, Michael, it is complex large-scale projects. It is difficult and dangerous to transport. It requires significant conversion capabilities and shipping capabilities if you actually want to move it. And gas customers are likely to transition to hydrogen. So for us, it is a perfect play in terms of our role in decarbonization. One thing I would mention, Alison, to what you were saying is this is also why we see renewables playing a role.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Michaela, I totally agree. I think we see hydrogen playing a critical role with the same order of magnitude in terms of primary energy demand share. I think definitely towards hard to abate sectors, including, by the way, on the longer term, aviation and e-fuels, we see the same acceleration coming in, powered in particular by Repower Europe and that confluence of hydrogen being one of a critical drivers to actually reduce reliance on import of gas. We also see, interestingly, an acceleration in terms of demand, right? Customers actually also from other regions. And I think similarly prices might play a critical role in terms of being in the money or not, but actually asking already for green or blue hydrogen supply. I think in terms of map, we see a world where we see local hydrogen.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Produced in summer, the only way we can bridge this seasonality issue is through hydrogen. And that's why we believe a development in large scale of green hydrogen in Europe will be a great way to turbocharge the development of renewable power without suffering from seasonality problems. But I also pass it on to Julia because clearly her company is one of the most active in this area.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely, you know, Julia mentioned it as one of the key drivers of decarbonization, but also of low carbon growth for the big oil companies as they become big energy companies. And there's no doubt that when we look at what carbonomics cost curve, actually hydrogen is the key decarbonization technology for a lot of the hard to evade sectors, especially heavy transport and heavy industry. And that's why we've always estimated hydrogen would ultimately need to drive between 10 and 15 percent of global decarbonization, unlocking at least 5 trillion dollars of investment over the next three decades. But I think the recent energy crisis has added extra urgency because if Europe wants to substitute Russian gas, which is mainly consumed in winter, with renewables, which are most”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Think we have a long track record of some of these low carbon technologies being deflationary. We've seen it over a decade for solar and wind, but they certainly are not deflationary today. They are suffering from the tightness in the global supply chain as so many other parts of the industrial sector. And we're seeing somewhere between a 10 and the 40% increase in pricing across solar, wind, and batteries. We believe it's temporary. We believe development in scale of these technologies will ultimately bring their costs lower, but there is no doubt that right now we are into an inflationary phase.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Perspective are actually in the money today in Europe because of the extremely high gas prices. And this is certainly an angle that we need to think about. And if there is one positive consequence from this energy crisis, it is, we believe, the acceleration of some of these low-carbon technologies.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Think higher hydrocarbon prices are a driver of decarbonization because renewables become more attractive in an environment of high electricity prices until a few months ago we were looking at purchasing agreement of renewables which kept going lower and lower and lower really challenging the economics there and there was this view that returns would only fall in renewables. I think this energy crisis has many negative consequences as Julia highlighted but if we want to look for the silver lining it does make this low carbon technologies more attractive certainly renewables with much better purchasing agreement looking forward but also technologies that looked incredibly marginal like green hydrogen until recently from an economic”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“26 up to 26 gigawatts of renewable capacity developed 1.6 million tons of hydrogen produced or 9 million tons of ammonia this is big and is a clear indication of our willingness but also the acceleration in this”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“That's three times two to three times what we did in 2021. And for hard to abate sectors, which are sectors where we can't electrify, and that's one third of energy demand today, we will need hydrogen, bioenergy, and CCS to actually play a role. So as you can imagine, it creates a huge opportunity for us. And that's really at the core of what we've done from a strategy standpoint in setting an ambition to net zero and setting mid long-term and medium-term targets to get there, covering scope one, scope two, and scope three. And a free P strategy with hydrocarbons, mobility and convenience and low carbon. And we're in action. So a week ago, we announced the Asian Renewable Energy Hub, which has the potential to actually become one of the largest global hydrogen hubs. So we've acquired a 40% stake in it and operatorship. And you're talking about...”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Well, it's very much the prerogative of actually getting to net zero. And if you think about it, it's really a trilimmer in terms of how do we deliver cleaner, reliable, and affordable energy. Now, that requires, as Michela was saying, trillions of investments in terms of getting there because it's a fundamental rewiring of the entire energy system. And I don't know how it's going to play out in terms of pathway, but there's a few truths that we know will play out. First one is in the energy demand mix, we'll see fossil fuels over time decreasing. So if you take Paris line scenarios, we're talking about 25 to 50 million barrels a day in 2050 versus 100 today. So there still is oil in the system, but less. Gas is more resilient. Electrification doubles to 2050 with renewables. If we are to get to net zero, basically having to grow to approximately 600 to 700.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“And in many ways, you're really just seeing your customer base change in terms of their urgency and need to diversify energy resources away from traditional hydrocarbons, again, given this push towards decarbonization and focus on climate change mitigation. So how has that impacted your strategy?”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“In terms of increasing cost of living, inflation, and lower economic growth and potential implications in terms of recession. So it creates an extremely uncertain environment to navigate, both in terms of macroeconomic environment as well as energy, where very different stances and different geographies. So Europe seeing it as an opportunity to accelerate because the levers for the energy transition basically play into security of supply and independence from Russia other regions playing it very differently. For us, it's just a restatement of our strategy and what we need to do, which is basically do the right thing and do the right thing was really at the core of our decision to exit Russia, continue to invest in our resilient hydrocarbons business to supply the oil and gas that the world so needs today and making that business resilient and accelerating and continuing to invest in our transition growth engines to build the alternative.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Russia also plays a critical role. In 2021, Russia produced 10.5 million barrels a day of oil and was the largest global exporter. The IEA estimates that approximately 3 million barrels a day of that production is actually offline today due to sanctions. If you take gas, Russia was supplying in 2021 32% of European gas and 55% in Germany. And if you look at Midstream 1 last week, volumes decreased by 60%. So that creates a fundamental pressure that brings into the equation security of supply. The third key challenge is climate. So a lot of commitment, a lot of ambition. And yet if you look at 2021, emissions again have risen by 5.7% in our stats review, which basically means a rebound from the 2020 dip, which was linked to lockdowns. And then the fourth one is the societal crisis.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Yes, so I think it's fair to describe it as an exceptional confluence, I would say, of four challenges. The first one is unfortunately obviously the human tragedy and the war in Ukraine with so many lives impacted and also with impacts in terms of global food supply chains. The second one is very much around the energy crisis. So Michaela gave some numbers. We just published our stats review. And what we're seeing happening is this on one side demand rebounding post-pandemic. So in 2021, we've seen primary energy consumption actually grow to be 1% higher than what it used to be in 2019. So on one side, we have energy demand growing. And the other side, we have supply constraints. And Mikhaila talked to the supply constraint driven by past investment. But of course,”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Investment in energy is unsustainable and hurtful to society. And we think it's really signaling this turning point from effectively a 10% negative decline in energy investment from the last seven years to what we believe should be a 15 to 20 percent per annum growth looking forward.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“Think it's a complete turning point after seven years of structural underinvestment. Let me put a couple of numbers to it. If we take all of the investments in primary energy, so not just oil and gas, but also solar, wind, nuclear, bioenergy, we sum it all up. We used to spend about $1.5 trillion per annum up until 2014. And since then, that investment has started to decline reaching a trough of only $1 trillion in the last couple of years. We believe that investments need to rise again at least to $1.5 trillion. More likely to $2 trillion carbon by 2050. And finally, after this conflict, the world that governments, but also investors are starting to realize that this under”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT
“It's really a trilimmer in terms of how do we deliver cleaner, reliable and affordable energy. Now, that requires trillions of investments in terms of getting there because it's a fundamental rewiring of the entire energy system.”
2022-07-19 · Goldman Sachs Exchanges · How Companies are Navigating the Energy Transition · IDENTIFIED FROM THE TRANSCRIPT