1. What would you think about this bold reorientation in BP business strategy?

How can the industry accelerate and lead on orderly Decarbonization Transition to 2050 and
beyond?

I think it is more than saving the core business. Its more about orchestrating the transition across
sectors and beyond the limits of its value chain. Companies that act now will not only lead the
decarbonization charge toward 2050, but reposition for commercial success for many years after.
To date, more than 800 companies have committed to science-based targets to align strategies
with the Paris Agreement, including BP.

In my opinion, there are 3 distinct roles that today’s oil and gas companies like BP can assume
during the transition and beyond. Players across the energy system have three types of action at
their disposal. They can Clean the Core to minimize emissions and maximize efficiency from
current operations, infrastructure, and value chains. They can Accelerate the Transition to
replace existing sources of energy and demand with available and competitive cleaner and zero-
emission alternatives. And they can Extend the Frontier to adopt and scale new sources of
energy, processes and technologies that are beyond what is commercially and technically
possible today. I think BP strategy is well implemented to take into account these 3 roles.

Will this serve well to the company’s future ambition and aspiration?

I think BP bold strategy will surely serve well to their future ambition and aspiration, “reimagining
energy and to be a net zero company by 2050”. They are pivoting out from being an international
oil company focused on producing resources to an integrated energy company focused on
delivering solutions for customers. Their strategy is intended to deliver long-term value for their
stakeholders. And that delivery will be anchored in their new sustainability framework.

It starts with the purpose and a set of core beliefs about the future. These inform their strategy,
delivery of which will be anchored in a new sustainability frame. Their strategy is underpinned
and enabled by a resilient financial framework. And the integration of each of these elements
supports a compelling investor proposition. Taken together, I think this will successfully create
long-term value for all stakeholders - employees, suppliers, partners – customers, communities
and countries.
 Bp has three area of focus and three sources of differentiation put in their strategy. I also think
this is a right move to focus on these three areas because together it will put their purpose into
practice. They are aligned with, and mutually reinforce, their strategy. And – recognizing that
there is only so much that they can do - they concentrate their efforts and resources where they
believe they can make the most difference.

Why do you think BP is doing what it is doing? and

Driven largely by consumer demands for cleaner energy system and investor pressures for
reliable financial and a number of stakeholders such as environmental activist, regulators, and
providers of renewable energy, as well as environmental, social, and governance (ESG)
performance, BP change their business strategy.

Some of the loudest calls for BP to change course come from the industry itself. Oil and gas
industry have agreed that financial returns are increasingly aligned to environmental, social, and
governance (ESG) outcomes. There is a correlation emerging between strong corporate
performance on ESG factors and a company’s stock performance. Over the past few years, the
stocks of companies with high ESG ratings have tended to outperform, even in COVID-19 crisis.

Furthermore, the shift to a sustainability mindset is accelerating. In the 2018-19 period,

2. What would be the impact of such bold move of BP and other similar companies’ situation (e.g.,
Amazon, Walmart, General Motor, and more recently, FedEx, which have made similar
statement: https://www.washingtonpost.com/climate-environment/2021/03/05/more-than-50-
companies-have-vowed-be-carbon-neutral-by-2040/ to other companies that have not made any
statement at all?

Major companies around the world have pledged net-zero emission commitments.

For sectors adjacent to or dependent on oil and gas, such as power and heavy industries, if they
want follow suit BP action, they can similarly reduce emissions by improving energy and materials
efficiency and capturing greenhouse gases to clean their core operations.

Around 40% of companies that have announced net zero pledges have yet to set out how they
aim to achieve them. So, I think for the company that have not made statement yet, it is because
they don’t have a clear strategy yet.

Many companies will try to formulate the detailed plans, the main options include direct
emissions reductions, use of CO2 removal technologies, such as afforestation, bioenergy with
carbon capture, utilization and storage (CCUS), or direct air capture with CO2 storage, and
purchasing emissions (credits generated through emissions reductions that occur elsewhere).
Effectively addressing Decarbonization Transition requires new models of partnership, innovation
and collaboration across company. Even the perfect strategy will not succeed without putting skin
in the game and actively working with the companies to actively lower emissions in their
operations, processes and activities.

Can you relate this specifically to the company that you are currently associated with?

While transitioning toward net zero emission, same as BP, PT Badak NGL, and other oil and gas
companies must look beyond the impact of the transition within their own operations. They need
to consider how their scope of engagement across the energy sector and actions might influence
or support their customers and help to architect changes in adjacent sectors.

PT Badak NGL, therefore, need to position themselves as partners to their customers, jointly
committed to supporting their emissions-reduction strategies and harmonizing emissions
reporting. The good news is that as energy shifts from being a pure commodity to a source of
tangible customer value, new partnership models will take shape to drive the transition.

Importantly, PT Badak NGL need to be actively creating something else: stronger customer
relationships. To take optimal advantage of these new opportunities, PT Badak need to
appreciate that the end-customer journey and demand patterns will continue to change. The
target end consumers for oil and gas companies (and other sectors where they play an important
role) are shifting from primarily large businesses to also include small businesses, B2B2C
operators, and even individual consumers such as households or neighborhoods (for power
services, for example). Reaching and engaging these customers during and after the
Decarbonization Transition will be key.

Within the company that you are currently associated with, what would be the impact to the
specific unit that you are currently being part of?

My working unit, IT section, will have meaningful impact from transition strategy which create
new partnership models and stronger customer relationship to jointly committed to support their
emission-reduction strategy to work together to reduce emissions.

The business model will move toward digital and innovation, which will be led by IT section, to
enable new ways to engage with customers, create efficiencies, and support new businesses. It
will aim to transform core businesses – creating opportunities to drive integration, unlock value
and engage with new customers and markets. Digital will be an enabler of a significant part of the
cost savings from creating seamless digital experiences to grow our customer facing businesses.
Digitalization also focusses on driving integration in everything we do. Through integration we
bring everything together, to create end-to-end customer solutions. We will integrate and
optimize along each value chain.

3. Last but not least, what would you think the trends that are exemplified or shown by BP and
other companies with similar aspirations have an impact on your professional career?

The NZE inevitably brings significant challenges for fossil fuel industries and those who work in
them, including me, but it also brings opportunities. Sure, there will be a major contraction in
fossil fuel production, but companies that produce these fuels have skills and resources that
 could play a key role in developing new low-emissions fuels and technologies, to develop at scale
a number of clean energy technologies such as CCUS, low carbon hydrogen, biofuels and offshore
wind. Scaling up these technologies and bringing down their costs will rely on large-scale
engineering and project management capabilities, qualities that are a good match to those of
large oil and gas companies. By partnering with governments and other stakeholders, the oil and
gas industry could play a leading role in developing these fuels and technologies at scale, and in
establishing new business models.

And how are you going to start adjusting to it?

To start adjusting to it, it can begin from shifting our social norms and expectations to zero-carbon as
the new normal. We need to make decisions in the expectation and in support of a shift to net-zero
instead of business-as-usual as the business default.

To thrive during the transition and shape it, we could focus on creating strategic alignment and
reallocating skill and talent.

Businesses face many uncertainties as they try to understand what the transition to net-zero would
require of them. Professional worker can embrace this as a challenge and make calculated bets on
innovative product substitutes while building a strong narrative to bring other employees, investors,
and customers on board.

As for talent, the existing workforce may be well-suited to the zero-emissions transition. However,
we would need to reskill and redeploy this talent quickly. For example, the company could shift
capital project engineers to low-carbon projects now.

So, we need to prepare about change in workforce planning that considers reskilling, outsourcing,
and replacing talent where necessary in the future. Also, we need to take into consideration about
collaborating with others on reskilling, a coalition of companies within industry and educators to
develop digital talent.