BP a trusted, valuable partner of China
Energy firm is committed to helping nation develop its enormous potential How has your company benefited from the country’s reform and opening-up policy?
Please use three words to describe China’s changes in the past 40 years.
For four and a half decades, BP has been building strong relationships with dynamic Chinese businesses. Over that time we have witnessed remarkable changes. Many superlatives are used to describe China’s transformation, but if I were to choose just three words, they would be speed, growth and partnership.
What are the biggest achievements in China since the adoption of the reform and opening-up policy 40 years ago?
The past 40 years have seen China’s economy soar. It is now the second-largest in the world and plays an increasingly vital role in global growth.
Another element of this growth story is the role China plays in driving the global economy, particularly in the energy sector. BP’s most recent Statistical Review of World Energy found that, for the 17th consecutive year, China was the biggest contributor to global energy growth. It accounted for more than onethird of the growth in global energy consumption and 23 percent of global energy consumption in 2017.
China has made notable progress in pursuing sustainable development. Its commitment to the Paris Agreement has been well-recognized.
Meeting the energy demand of the growing economy while reducing emissions is a big challenge. BP’s recently published Energy Outlook suggests China’s carbon emissions could even peak a few years before the current 2030 goal.
We are committed to helping China develop its enormous energy potential while working with our Chinese partners to make the most of the commercial opportunities available.
As we enter the next phase in our relationship, 45 years since BP’s entry to the Chinese mainland market, we hope to continue to strengthen our ties as a trusted and valuable energy partner.
I have been coming to China for around 20 years in different capacities with BP. I am a great admirer of this country. A lot has changed in that time. Throughout this period, BP has been steadfast in its commitment to investing here.
We began our investments early on in China’s recent economic development trajectory. We are proud to have stayed the course over the past four and half decades, developing partnerships that benefit both BP and China.
From my perspective, as BP’s executive responsible for our presence in Asia, we benefit from the wealth of worldclass talent that China offers. Today, we have a Chinese operation that is run by Chinese nationals, and we have Chinese colleagues helping to develop our business around the world.
Another source of pride for BP is the development of our substantial petrochemicals and manufacturing businesses here. These are large, complex operations and a testament to what we can achieve when we work together.
Of course, our collaboration with Chinese partners extends beyond the country’s borders. A good example of that is the Rumaila oilfield in Iraq, where we have worked closely with China National Petroleum Corp. It is a vast field that produces 1.4 million barrels per day. BP, CNPC, the government and the people of Iraq all benefit from our close partnership.
What’s the biggest challenge China faces today and how can the country overcome it?
Perhaps the biggest challenge is the one facing societies around the world: the ‘dual challenge’ of meeting rising demand for energy while reducing greenhouse gas emissions.
This country has a population of nearly 1.4 billion and accounts for one-seventh of global economic output, which means a lot of energy is needed. At the same time, to meet the Paris Agreement, China’s carbon emissions need to stop rising by 2030.
Work is already under way to try and make that aspiration a reality. Last year China’s carbon emissions rose by around half the annual 10-year average. Our most recent Energy Outlook suggests China’s carbon emissions even could peak a few years before the 2030 goal.
China has made this progress by decreasing its reliance on coal, increasing investments in clean energy and shifting its economy away from heavy industries.
As well as demonstrating the seriousness of China’s commitment to deal with the climate challenge, this shows the world what can be achieved when policy, technology and economics converge.
How do you view China’s role in the world today?
China will continue to be a vital shaper of global prosperity as its remarkable growth matures, diversifies and develops quality and depth.
China is the world’s largest consumer of energy and could alone account for one-fourth of the increase in global energy demand out to 2040.
At BP, we think gas is going to play an increasingly powerful role in the transition toward a lower carbon future. China looks to be an important factor in that process. We are seeing a rapid shift away from coal to gas in Chinese power generation. Last year, China’s demand for gas grew by more than 15 percent — making up around one-third of the world’s demand last year.
China could also be on course to become the secondlargest shale gas producer after the US by 2040. The US Energy Information Administration says China sits on top of the largest shale gas reserves in the world. BP is partnering with CNPC to explore shale opportunities in the Sichuan basin. total gas
How do you comment on the meteoric rise of Chinese companies, especially in the past two decades?
Our experience has been that great progress can be achieved by working together with the right partners. We are proud to be seen as a trusted and supportive partner for so many Chinese companies.
That includes activities both within China and also around the world, such as with CNPC in Iraq and Australia; with Sinopec in Angola and Singapore; with China National Offshore Oil Corp in Australia, Indonesia and Argentina; and with China National Aviation Fuel in Singapore.
CV Could China’s experiences and practices be used to solve global problems?
In our sector, discussions about the future always come back to the dual challenge.
The transition to a lower carbon future is already under way, and China is doing impressive work in this area. It seems increasingly likely that China’s demand for coal has already peaked. Looking ahead, BP’s most recent Energy Outlook suggests changing demand patterns and the shift toward lower carbon fuels could cause China’s carbon emissions from energy use to peak in the mid-2020s.
At the same time, China is turning increasingly toward renewable energy and nuclear. They could potentially account for meeting more than 80 percent of the increase in China’s energy demand by 2040.
This is great progress. But to meet the rapidly rising demand, we are going to need all types of energy — including oil and gas. To advance the energy transition, we need to make those fuels cleaner and more efficient.
What measures are needed if China wants to deepen reforms?
As a long-term investor in China, BP appreciates the efforts and commitment made by the Chinese government to make it easier for businesses like ours to invest here.
We welcome the Chinese authorities’ recent decision to ease restrictions on foreignowned retail sites in China.
Actions like this will help to ensure we can continue to invest in China, make longterm plans and grow sustainably.
What is the most unforgettable experience you have had in China?
Previously in my career I was the chief executive of Air BP. I attended the inauguration ceremony for a major Chinese airport.
This involved welcoming the passengers off the first airplane to land there. You might have expected this aircraft to be carrying business leaders, politicians or dignitaries.
In fact, it was a group of construction workers who had helped build the airport, who were the honored guests.
It has been an image and lesson that has stayed with me all these years.
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