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Photo: Ben Stansall/AFP via Getty Images

BP posted a $6.7 billion second-quarter loss and cut its dividend in half Tuesday while unveiling accelerated steps to transition its portfolio toward low-carbon sources.

Why it matters: The announcement adds new targets and details to its February vow to become a "net-zero" emissions company by mid-century.

  • It also signals how one of the world's most powerful fossil fuel companies is navigating a landscape upended by the COVID-19 pandemic. The crisis has put immense financial pressure on even the largest players like BP, which in June announced plans to shed 10,000 jobs.
  • BP essentially sped up plans to fill in big blanks about its repositioning that had been slated for September, though it still plans to provide more details next month.

Driving the news: BP intends to cut its aggregate oil and natural gas production by 40% by 2030 — from 2.6 million barrels per day of oil-equivalent to around 1.5 million — and says it's planning no exploration in new countries.

  • BP plans to increase its low-carbon energy investments to $5 billion annually by 2030 — a tenfold increase but nonetheless still much smaller than current spending on its core businesses.
  • BP, as part of that plan, hopes to develop 50 gigawatts of renewable generation capacity, which is 20 times last year's levels.
  • Other goals include expansion of its hydrogen and electric vehicle charging units, with plans for a roughly tenfold increase in EV charging points to 70,000 by 2030.

The intrigue: It's BP's first dividend cut since the 2010 Deepwater Horizon disaster in the Gulf of Mexico, and comes three months after rival Shell slashed its investor payouts.

  • BP said the cut to 5.25 cents per share is part of the wider repositioning. It plans to keep the dividend at the lower level, but said shareholders will benefit because BP plans to return at least 60% of surplus cash to investors once its net debt falls to $35 billion.
  • The company's stock is up roughly 8% this morning.

The big picture: The company said the dividend cut is part of a new "investor proposition" that positions the company to deal with the pandemic and the longer-term move toward lower-carbon sources.

  • "The board believes setting a dividend at this level takes into account the current uncertainty regarding the economic consequences of the COVID pandemic, supports BP’s balance sheet and also provides the flexibility required to invest into the energy transition at scale," BP said.

What they're saying: Greenpeace UK's Mel Evans, in a statement, called BP's moves a "necessary and encouraging start" on climate but added that the company "must go further."

  • "BP has woken up to the immediate need to cut carbon emissions this decade," Evans said of BP's plans to slash oil-and-gas output.

Go deeper

Oil group CEO on France blocking LNG deal: "We take great umbrage"

Illustration: Annelise Capossela/Axios

The CEO of the American Petroleum Institute criticized the French government’s move blocking a $7 billion deal to import U.S. liquefied natural gas over concerns about climate change.

Why it matters: The tension reflects intercontinental division over how aggressively governments and companies should tackle global warming, including the potent greenhouse gas methane that’s the primary component of gas.

Updated 12 mins ago - Science

Volcanic eruption in Tonga caused "significant" damage

This satellite image of the eruption on Jan. 15 taken by Himawari-8, a Japanese weather satellite operated by Japan Meteorological Agency and released by National Institute of Information and Communications Technology (NICT). Photo: NICT via AP

Significant damage has been reported in Tonga following an undersea volcanic eruption on Saturday, which covered the Pacific nation in ash and cut off communication lines.

Driving the news: The eruption triggered tsunami warnings across Tonga's islands and in other regions, including the West Coast of the U.S. and New Zealand.

25 mins ago - World

North Korea launches 4th suspected missile test this month

A news broadcast in Seoul, South Korea, of an apparent North Korean missile test on Monday morning local time. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired "two suspected short-range ballistic missiles" eastward from Pyongyang on Monday morning local time, per South Korean and Japanese officials.

Why it matters: The fourth such launch since Jan. 5 comes days after North Korea's military warned of "stronger" action if the U.S. moved to have more sanctions imposed on the country.