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Speaker 1: Hi everyone, We're going to try something different this week.

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Speaker 1: As I mentioned at the top of the last show,

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Speaker 1: it continues to bear goal to bring you smart but

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Speaker 1: accessible insights from being a f analysts on a range

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Speaker 1: of topics relating to the transition to a low carbon future.

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Speaker 1: But of course insights can come from anywhere. Sometimes it's

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Speaker 1: good to have a different perspective. Sometimes it's good to

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Speaker 1: hear directly from leaders out there in the field bringing

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Speaker 1: about this low carbon future. This week on the show,

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Speaker 1: we've got Bob Dudley, Chairman of the Oil and Gas

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Speaker 1: Climate Initiative or o g c I, an international industry

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Speaker 1: lead initiative established in fourteen. The idea behind the o

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Speaker 1: g c I is that member companies come together to

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Speaker 1: take practical action on climate change and accelerate the reduction

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Speaker 1: of greenhouse gas emissions in full support of the Paris

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Speaker 1: Climate Agreement and its aims. Bob joined the oil and

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Speaker 1: gas industry in nineteen seventy nine. He's had a variety

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Speaker 1: of engineering, commercial and management positions worldwide, including serving as

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Speaker 1: Group Chief Executive of BP from to March of this year.

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Speaker 1: My co host Dana Perkins, who also heads up Europe

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Speaker 1: Middle East and Africa for BNF. Did this interview as

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Speaker 1: part of the BENF London Summit on October nineteenth. Being

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Speaker 1: a users can see this interview and more, including all

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Speaker 1: the BENF analyst talks from the summit, on BNF dot com,

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Speaker 1: the Being mobile app in the Bloomberg terminal. As a reminder,

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Speaker 1: bean If does not provide investment strategy advice, and you

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Speaker 1: can hear the full disclaimer at the end of the

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Speaker 1: show him Mark Taylor, and you're listening to twitch On.

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Speaker 1: Now over to Dana for her interview with Bob Dadley.

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Speaker 1: Thank you for joining us today. Good morning Dana and everyone.

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Speaker 1: Good to be here. This is a treat for me

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Speaker 1: to be able to interview you. So let's dive in

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Speaker 1: with the first question. So I have that for many companies,

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Speaker 1: emission reductions targets are really paris aligned and focused around

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Speaker 1: the year. But at the o g c I, you've

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Speaker 1: chosen to look a little bit nearer term and looking

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Speaker 1: closer five years into the future. So why was the

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Speaker 1: choice made to focus emissions reductions targets on the nearer term. Well,

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Speaker 1: the o g c I are the Oil and Guest

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Speaker 1: Climate Initiative is twelve of the biggest companies in the world,

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Speaker 1: and we thought it would maybe be too easy to

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Speaker 1: put a number out there in so we set near

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Speaker 1: term targets, worked out methodology together. We set targets in

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Speaker 1: twenty set a baseline seen targets. We have rigorously gone

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Speaker 1: through and and measured. Third parties have verified our numbers

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Speaker 1: and on two targets, one is methane reduction targets. We

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Speaker 1: set a target of point to five by came in

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Speaker 1: at point to three percent this year, so ahead of

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Speaker 1: where we thought we would be in twenty So that's

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Speaker 1: really good news. And this allows us then to keep

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Speaker 1: pushing ourselves, sharing information and data, and keep rigorously moving

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Speaker 1: towards the targets which I'm sure we'll set to point

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Speaker 1: to next in a near short time. We've done the

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Speaker 1: same thing with a carbon intensity target on our upstream operations.

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Speaker 1: This is really good news, better outcome than we ever

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Speaker 1: expected as we started. It's still a long way to go, though,

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Speaker 1: so why do you not also have a long term

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Speaker 1: goal that's kind of further out into the future that

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Speaker 1: you're also working towards, Because it looks like you're going

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Speaker 1: to continue to beat the short term goals. Well, it's

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Speaker 1: a it's twelve companies. Three of them in national oil

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Speaker 1: companies and and and the others are international oil companies.

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Speaker 1: Some of them require their governments to approve the long

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Speaker 1: term targets, but many of the individual companies have set

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Speaker 1: targets out there at targets or earlier in different metrics.

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Speaker 1: But this is a collective. It's a big collective. So

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Speaker 1: we do what we can do. And it's actually easier

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Speaker 1: to set a target shorter term and then push rather

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Speaker 1: than the really one far out on the horizon. What

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Speaker 1: are the best ways that the O g C I

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Speaker 1: has I guess among the members and the collective to

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Speaker 1: hold each other accountable. Well, we we we get together.

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Speaker 1: We avoid anto the antitrust issues which you have to

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Speaker 1: We never talked about oil prices. But when we do

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Speaker 1: get together, we talk about the technology, We talk about

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Speaker 1: new ideas, we talk about things that we're doing in

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Speaker 1: the field, and collectively, we've also set a billion dollar

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Speaker 1: fund to clean technologies, many of which involve the monitoring,

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Speaker 1: the detection, the measurement of of methane emissions, for example,

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Speaker 1: using on surface technolo oologies, drones and satellites. We just

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Speaker 1: launched the second satellite with the company we invest in.

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Speaker 1: So we do it through our investments, and then we

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Speaker 1: also allow those companies that we invest in to use

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Speaker 1: our big sets of assets around the world to do

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Speaker 1: pilot projects and test things. Uh, and then we share

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Speaker 1: all that data and information. So it's it's truly something

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Speaker 1: unusual I think among big sectors and industries that the

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Speaker 1: big players in the in the sector come together to

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Speaker 1: try to all work together towards reducing emissions and our

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Speaker 1: carbon intensity and our footprints. And by doing that creates

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Speaker 1: a little bit of internal competition as well among the company.

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Speaker 1: So it's a good mechanism and it's it's come a

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Speaker 1: long way, I would say since it started about Yeah,

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Speaker 1: how does that work in practice among the conversations with

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Speaker 1: the organizations because in theory they well not in theory,

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Speaker 1: in reality they are competing against one another and yet

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Speaker 1: are working towards this common objective. How do you create

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Speaker 1: that environment where they can kind of put the competitive

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Speaker 1: part way and and work together as a team. Well,

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Speaker 1: one thing about all these companies is they're deeply committed

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Speaker 1: to achieving the goals of Paris. It's absolutely built into

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Speaker 1: all of their strategies. All of them have different portfolios,

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Speaker 1: so it makes a little different for the companies themselves,

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Speaker 1: but we're all committed to a common goal and you

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Speaker 1: almost have to get a group of companies like these

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Speaker 1: to develop a common language. So the actual calculations what

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Speaker 1: you do doing it all the same way has has

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Speaker 1: taken quite a bit of technical time. So when we

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Speaker 1: get together we talk about the pressures that we have.

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Speaker 1: We also have, you know, the pressure the energy transition

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Speaker 1: is there, the COVID pressures are down on demands, is

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Speaker 1: enormous pressures on all the companies, and you'll see them

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Speaker 1: having a restructure right now as well, and their portfolios

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Speaker 1: are changing, some at different paces than others. And we

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Speaker 1: don't talk about individual strategies so much. But the one

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Speaker 1: thing about the oil and gas industry, and I have

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Speaker 1: thought about this for a long time, I don't think

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Speaker 1: there is another industry in the world that competes so

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Speaker 1: fiercely but also partners uh in big projects around the world.

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Speaker 1: And that's partly because of national oil companies work within

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Speaker 1: the national oil companies and projects together, and the size

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Speaker 1: and sheer scale of the capital was always so great

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Speaker 1: that it was rare actually that one company wanted to

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Speaker 1: take on all the capital on one of these big projects.

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Speaker 1: So it's a unique kind of industry and it leads

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Speaker 1: to competition, s fierce competition as well as a cooperation

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Speaker 1: that's very unusual. It would be good to see on

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Speaker 1: climate other sectors taking this on as well. You could

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Speaker 1: see cement or chemicals, or steel or aluminum would be

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Speaker 1: a good thing if they could do this as well. Yeah,

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Speaker 1: so how does the knowledge sharing work? So let's say

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Speaker 1: somebody listening now is in chemicals or steel. How do

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Speaker 1: you go about sharing that information with each other? And

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Speaker 1: what are the various forms that exist. Well, one of

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Speaker 1: the things when we set this up, Dana, was that

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Speaker 1: we said the Oil and Gas Climate Initiative needed to

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Speaker 1: be CEO lad There's a lot of organizations that were

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Speaker 1: all part of but the CEOs themselves needed to remain

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Speaker 1: deeply committed to it and that's important and that takes

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Speaker 1: a lot of CEO time. So underneath that, though, we

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Speaker 1: have a series of work streams that work on the gas,

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Speaker 1: the methan initiation missions, we have low carbon fuels work streams,

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Speaker 1: so we have people that are brought into counted in

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Speaker 1: from each of the companies. We have a permanent staff

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Speaker 1: and o g c I that manages the work streams.

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Speaker 1: And in addition that big commitment to the billion dollar

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Speaker 1: fund that in itself is has people's its own board

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Speaker 1: from the companies as well, so we have representatives that

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Speaker 1: that supervised this, so that knowledge sharing happens at multiple

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Speaker 1: levels in the company, not just the CEOs, but the

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Speaker 1: CEOs do get together and talk about it and steer

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Speaker 1: it and like to be frequently updated on things. So

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Speaker 1: the organization probably has maybe forty people working in O

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Speaker 1: g c I. For O g c I multiple seconds,

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Speaker 1: and then of course the CEOs. It works pretty well.

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Speaker 1: Took a while, it's a little bit like managing the

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Speaker 1: u N but it's taken a while and now it's

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Speaker 1: real and moving. It got buy in from the top,

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Speaker 1: so that makes a world of difference. Well, let's talk

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Speaker 1: about the members a little bit. They're comprised of international

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Speaker 1: oil companies and national oil companies, but a lot of

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Speaker 1: the climate news is really very much focused around these

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Speaker 1: international oil companies. What part do you think the national

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Speaker 1: oil companies and even smaller oil companies really have to

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Speaker 1: play in the story, And how how can you balance

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Speaker 1: out that narrative. Well, then that's a good point. I mean,

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Speaker 1: most of the attention seems to be attracted by the

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Speaker 1: international oil companies, the io c s in Europe and

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Speaker 1: in the US, but this organization goes way beyond it,

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Speaker 1: and it has the Chinese national petroleum companies CNPC, Saudia

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Speaker 1: Ramco has been involved from the very beginning, and Petrobras

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Speaker 1: in Brazil, so they're involved. Sometimes getting their approvals requires

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Speaker 1: government approvals to move some of the things we are

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Speaker 1: doing for so they managed a little bit different, but

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Speaker 1: the CEO has all work together and so everybody learns

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Speaker 1: from them. I think the environments that people work in

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Speaker 1: are different. So you have you have investors putting a

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Speaker 1: lot of pressure on some of the companies, maybe less

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Speaker 1: so on some of the national oil companies, or depending

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Speaker 1: on the geographies, you have E. S G Investing now

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Speaker 1: putting a lot of emphasis on this, and they can

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Speaker 1: invest only in certain companies. So it is a variety.

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Speaker 1: But the fact that they're all committed to it is important.

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Speaker 1: We have debated and talked about it as a group

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Speaker 1: many times. Should we expand the membership, But quite frankly,

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Speaker 1: this is thirty it has. We want to be leaders

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Speaker 1: in it. The technologies we developed were certainly up for

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Speaker 1: sharing with people, but don't want the organization to get

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Speaker 1: too big that it's hard to do things collectively on it.

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Speaker 1: So we do share the information with smaller companies and

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Speaker 1: some of the other national oil companies. We just have

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Speaker 1: had to because it's not that big an organization, practically

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Speaker 1: kind of limited at this. And again, this is thirty

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Speaker 1: percent of all the oil and gas production, and collectively

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Speaker 1: the numbers of methane emissions and the carbon intensity upstream operations,

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Speaker 1: they really are sort of a benchmark that any company

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Speaker 1: could and should use, and these are some of the

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Speaker 1: best companies in the world when you look at the numbers.

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Speaker 1: Let's talk a little bit about those emissions, so specifically

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Speaker 1: scope three emissions which are just notoriously difficult to measure.

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Speaker 1: What are your views around the best way to approach

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Speaker 1: this from the o g c I members and where

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Speaker 1: should the emphasis really be placed on emissions reduction where

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Speaker 1: there might actually be some progress? You right, around nine

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Speaker 1: percent of the emissions from oil and gas come from

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Speaker 1: the operations itself of carbon dioxide and make any emissions

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Speaker 1: come from that production and processing of things. We're all

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Speaker 1: working with our customers to look at how they can

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Speaker 1: reduce their footprints. And that's essentially what you know. Scope

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Speaker 1: three is how people use the fuels and the products

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Speaker 1: that are there. I have to say there's quite a

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Speaker 1: little spectrum of what a Scope three emission is. It's

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Speaker 1: quite a definitional issue that needs to be worked out.

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Speaker 1: O g c I is working together to come up

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Speaker 1: with it, just like we did on the others. It

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Speaker 1: takes a while. Common definition for Scope three or downstream emissions.

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Speaker 1: I think we're about there on refining definition On refining emissions,

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Speaker 1: it takes a lot of time, and just know everybody's

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Speaker 1: committed to it and no g c I, but scope three.

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Speaker 1: People throw around Scope three and it just needs a

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Speaker 1: tighter definition. People to use it outside of the industry

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Speaker 1: are all talking about different things as well, often but

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Speaker 1: obviously getting the intensity carbon intensity the fuels down. We

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Speaker 1: have work streams on that. That's one way of doing it,

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Speaker 1: and then of course directly working with different sectors and customers.

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Speaker 1: Another example might be in that billion dollar fund dimensioned.

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Speaker 1: We've invested with a company cement company that actually takes

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Speaker 1: CEO two out of the atmosphere and captures it in

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Speaker 1: the cement That could be revolutionizing as an example. But

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Speaker 1: there's a lot of intended energy intensive industries that we're

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Speaker 1: all working with. Airlines, aluminum, steel, cement. Yeah, there's some

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Speaker 1: really big ways to make I guess a meaningful impact

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Speaker 1: in these hard to abate sectors. And of those, you know,

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Speaker 1: I guess you're saying that the first place is to

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Speaker 1: create the definition. So so maybe the solutions aren't yet there,

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Speaker 1: But where do you think might be some of the

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Speaker 1: immediate partners you mentioned airlines? Do you think there are

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Speaker 1: other areas within Scope three that O, G, C, I,

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Speaker 1: S or just the members are going to be able

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Speaker 1: to reach out to and get some meaningful kind of

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Speaker 1: progress Because you have you have to make that interlinkage

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Speaker 1: as well. So cement is one we're working on. We

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Speaker 1: were invested in a cement company that does the process

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Speaker 1: different differently and so suddenly that's getting a lot of attention.

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Speaker 1: So this cement industry. Cement gives off a lot of

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Speaker 1: here too. For example, steel processing, we're working with some

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Speaker 1: of the steel companies on how they process things, and

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Speaker 1: the individual companies have their own relationships with big customers.

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Speaker 1: So this is another big area for us to move

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Speaker 1: into as O g C I and the individual companies

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Speaker 1: it will come. This is probably the hardest area. Actually,

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Speaker 1: we will continue to watch this space well. So let's

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Speaker 1: talk about some of the path forward in terms of

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Speaker 1: kind of the current climate right now. What areas do

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Speaker 1: you think maybe aren't getting enough attention that should be

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Speaker 1: getting attention. And this has to do with the fact

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Speaker 1: that I think everybody's sort of looking for some sort

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Speaker 1: of technology development or something that could pose as a

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Speaker 1: green swan, if you will, that's going to really move

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Speaker 1: the agenda forward because to your point earlier regarding short

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Speaker 1: term emissions, short term emissions reduction goals and longer term

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Speaker 1: emissions reduction goals, some of those longer term emissions reduction schools,

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Speaker 1: we don't really know how we're going to get there.

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Speaker 1: So what do you think could be a potential green swan.

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Speaker 1: There's probably not a silver bullet out there, but we

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Speaker 1: should certainly try to get as many of these bullets

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Speaker 1: as we can. And one that I think the public

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Speaker 1: in general doesn't know much about and their eyes kind

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Speaker 1: of glaze over when they hear things like ccus or

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Speaker 1: CCS so that's carbon capture u since storage or carbon

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Speaker 1: capture and storage. That's one area that o g c

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Speaker 1: I is focusing a lot on. There's about thirty c

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Speaker 1: c US projects around the world out there. Almost any

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Speaker 1: scenario that I've seen to get to the goals of

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Speaker 1: Paris are going to require carbon capture and storage. So

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Speaker 1: we've we've looked at five kickstarter programs around around the

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Speaker 1: world that we're looking at, one of the Netherlands, Norway,

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Speaker 1: the US, when China and the UK UH and o

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Speaker 1: g c I, the Climate Investment Group actually spent quite

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Speaker 1: a bit of money laying out the technology and helping

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Speaker 1: the UK government developed the policy that encourages a big

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Speaker 1: project in the UK called net and zero t side,

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Speaker 1: which will take a lot of industrial complexes and capture

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Speaker 1: the CEO two and then it can be piped offshore

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Speaker 1: and put way back down to the ground where originally

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Speaker 1: came from as an example, and these can make big

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Speaker 1: differences in the emissions profile of the world. It's not

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Speaker 1: the green Swan, I think, but it's an important one

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Speaker 1: and so we're working with governments like the US is

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Speaker 1: fort Q, which is a policy that is in the

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Speaker 1: US probably the best policy initiative in the world really

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Speaker 1: to enable it big one around Rotterdawn Harbor, to create

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Speaker 1: a ring around the Big Harbor, and the industrial complexes

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Speaker 1: also take that out and put it under the ground

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Speaker 1: as an example. And then further down the road, i'd

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Speaker 1: expect CO g c I to get involved with hydrogen.

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Speaker 1: Hydrogen is going to be a big, big contributor to this,

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Speaker 1: and I'll just remind people that don't like natural gas,

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Speaker 1: and natural gas is really three carbon atoms, three hydrogen

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Speaker 1: atoms connected to a carbon atom, and then you can

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Speaker 1: move it around and then decarbonize the gas and have

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Speaker 1: the hydrogen so it can be a carrier. Those are

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Speaker 1: the sort of things that could really make a difference

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Speaker 1: later in the decade, some creative solutions, and I think

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Speaker 1: we're going to continue to very much watch this space

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Speaker 1: on those technologies. So right now, the energy industry is

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Speaker 1: going through a great deal of change, and I want

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Speaker 1: to know from your standpoint, you know, what are some

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Speaker 1: of the lessons that you've learned both during your time

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Speaker 1: as the CEO and more importantly also working with the

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Speaker 1: other senior executives that you work with through the O

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Speaker 1: g C I about the best way to lead through

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Speaker 1: change and really navigate what would be considered bumpy waters. Well,

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Speaker 1: this is bumpy waters in the energy industry the whole

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Speaker 1: time I would have been in the industry. Usually there's

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Speaker 1: a cycle up and down. When the upstreams up, the

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Speaker 1: downstream is down and vice versa. This time everything is down.

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Speaker 1: Demand is down across the world and everything. It's not

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Speaker 1: just oil and gas, it's everything, you know, hospitality, industries, flying,

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Speaker 1: many many manufacturing. It is a tough, tough economy. I

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Speaker 1: think as a leader of those, you have to be

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Speaker 1: very flexible. You have to have patience and perseverance. That's

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Speaker 1: definitely got to be a hallmark of what's happening now.

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Speaker 1: And uh, I always say nothing great happens without enthusiasm,

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Speaker 1: So leaders have to be enthusiastic, and people right now

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Speaker 1: need to be energized because these it's really hard, and

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Speaker 1: leadership through the camera, like what we're doing, is sort

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Speaker 1: of an unusual way to lead, and you know, you

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Speaker 1: sort of lose that close human touch you had when

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Speaker 1: you could travel and talk to many people and having

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Speaker 1: optimism about the energy transitions, changing your portfolios, working with

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Speaker 1: investors in a different way. It requires a different set

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Speaker 1: of leadership skills, but I think that one of patients

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Speaker 1: perseverance and optimism is what will get companies through. And

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Speaker 1: I can tell you the twelve CEOs I deal with

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Speaker 1: on this, they're all working very hard at This makes

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Speaker 1: me optimistic. I'm gonna say this conversation has made me

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Speaker 1: optimistic as well. Well. Thank you very much for your

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Speaker 1: time and for your insights today, Bob. We really appreciate

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Speaker 1: having you here. Okay, thanks Dana, thank you all very much.

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Speaker 1: Today's episode of Switched On was edited by Rex Warner

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