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BP and Harbour Energy on 11 April 2023 that they have entered an agreement to develop Viking CCS’s transportation and storage project. Under the terms of the agreement Harbour Energy will continue as operator of Viking CSS with a 60% interest, while BP has acquired a 40% non-operator stake in the company.

Carbon capture and storage (CCS) is a developing market, with promises of big government spending in the future. The two companies plan to ship carbon emissions from other parts of the UK and abroad via the port of Immingham, which has also been recently acquired. In order to meet up to a third of the UK’s annual target of capturing 30mn tonnes of carbon dioxide by 2030, Viking CSS plans to repurpose existing, but depleted, gas fields off the Humber region coast, a heavily industrialised region. Viking CSS has been the economic benefits of transforming the Humber. This is a very major project for BP to invest in; Executive Vice President of Gas and Low Carbon Energy at BP, Anja Dotzenrath, on the acquisition:

‘We're extremely excited to be joining Viking CCS, a project which can play an instrumental role in helping to decarbonise the UK and providing CO2 transport and storage as a service to emitters across industry sectors and geographies, including as a future CO2 shipping destination.’

It is worth noting the significance of this move in light of criticism directed at BP earlier this year after they , and subsequently reduced, their commitment to cutting oil and gas production by 2023. Instead, BP is choosing to lean further into their strategy by investing up to £6.4bn ($8bn) more into oil and gas by 2030. CCS could possibly be seen as a counter policy with direct environmental benefits.

Additionally, the UK government has promised £20bn of financial support for CCS over the next two decades; this is indicative of the financial viability for BP and also the green-friendly element of this project. CCS is considered vital to meeting the UK’s legally binding target to create a carbon neutral economy by 2050. It would also be ‘virtually impossible’ for the world to meet its climate targets without it, according to the International Energy Agency.

Neither Harbour Energy nor BP have disclosed the value of this deal; however, it is estimated to be in the low millions of pounds as there has only been limited expenditure on the project to date.

BP shares rose 1% following the announcement to 537p. Conversely, those of Harbour Energy fell 0.6% to 286.5p per share. Market Tracker will continue to monitor the developments.