3 hours ago
3
BP has agreed a deal to sell off its onshore wind business in the US as the oil multinational turns its back on renewable energy after a failed attempt to go green.
The company said it would sell its share of 10 windfarms, which generate enough clean energy to power more than 500,000 US homes, to the New York-headquartered LS Power.
The terms of BP’s deal with the power and energy infrastructure company were not disclosed. But the value of the windfarms, nine of which are operated by BP, is understood to be about $2bn (£1.5bn).
The sale is part of BP’s plan to offload $20bn in assets “to simplify and focus the business” after a failed attempt to reinvent the oil multinational as a net zero energy company, and as it comes under pressure over its sluggish share price.
BP said it was “no longer the best owners” to take the wind business forward. Renewable energy in the US has faced increasing pressure under Donald Trump’s presidency.
The deal emerged weeks after one of the architects of BP’s failed green agenda, Giulia Chierchia, stepped down from her role as executive in charge of sustainability strategy to “pursue other opportunities” outside the company as it shifted back towards oil and gas production. She will not be replaced at BP, the company said.
BP’s botched green ambitions have contributed to a collapse in the company’s share price over recent years, which has made the 120-year-old company easy prey.
Shell was forced last month to deny market speculation that it planned to snap up its smaller rival. Shell has lost almost a third of its market value in the past year and is now worth about £58bn.
It reported interest in BP emerged months after the activist hedge fund Elliott Management amassed a stake in the company to agitate for changes to BP’s strategy and its board.
So far the turnaround plan spearheaded by BP’s chief executive, Murray Auchincloss, has failed to convince investors that the company can recover from a difficult few years during which its rivals have thrived by focusing on fossil fuels while global markets have been volatile.
after newsletter promotion
Auchincloss plans to shore up BP’s balance sheets by completing $3b-$4bn of divestments this year, and has already agreed deals worth $1.5bn. He is expected to set out further progress on the divestment drive alongside the company’s financial results for the second quarter in the first week of August. Meanwhile, BP is searching for a new chair to replace Helge Lund.
William Lin, the head of the company’s gas and low-carbon energy business, said: “We have been clear that while low-carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalise and optimise our portfolio to generate value.”
“The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward,” Lin added.
