Big oil companies love to tout their investments in renewable energy, but this week's results from BP, the British oil major, show it can be financially painful to diversify out of oil and gas.
BP, which saturates its ads with the colour green and markets itself as "Beyond Petroleum" , lost $2.3 billion in the division of the company outside of its oil and gas production, refining and marketing businesses. The division, which includes solar energy and shipping operations, will lose another $1.6 billion this year, the company's chief financial officer, Byron Grote, told reporters Tuesday, as the company announced total quarterly net income of $4.3 billion.
The firm's chief executive, Tony Hayward, said BP would still invest $1 billion a year in renewable energy.
The firm's key clean energy interests in the region include solar energy and carbon capture and storage.
In Qatar, BP hopes to conclude a deal soon to sell a package of solar panels with capacity to produce several hundred kilowatts, Katrina Landis, the firm's chief executive for alternative energy, said last month.
"We believe that energy demand is going to increase 40 per cent by 2030," worldwide, she told the World Future Energy Summit in Abu Dhabi. "Renewable energy can fulfill 10 per cent of that increase."
BP, through its subsidiary Hydrogen Energy, is also working with Masdar, the Abu Dhabi Government's clean energy firm, to build a hydrogen power plant near Shuweihat that will splice out carbon dioxide from natural gas to form hydrogen and bury the carbon underground. The hydrogen would be burnt in a standard power station to produce almost 400 megawatts of electricity.