BP to Sell $2bn US Wind Energy Business, Refocusing on Solar Power

BP, one of the world's leading oil and gas companies, is planning to sell its American onshore wind energy business for approximately $2 billion (£1.5 billion). This decision marks a significant shift in the company's renewable energy strategy, as it aims to concentrate more on solar power initiatives.

BP Wind Energy, the unit slated for sale, currently operates 10 onshore wind farms across seven US states. William Lin, BP's natural gas and low carbon chief, stated that the business might be more valuable under different ownership. Despite this divestment, Lin emphasized that renewable energy remains an integral part of BP's transition strategy towards becoming an integrated energy company.

The company's focus will now shift to Lightsource BP, its solar energy venture. BP intends to expand Lightsource's capabilities in developing cost-competitive, utility-scale renewable power assets for both solar and onshore wind projects globally.

This strategic realignment comes in the wake of recent leadership changes at BP. Murray Auchincloss assumed the role of chief executive at the beginning of 2024, while Kate Thomson was appointed as chief financial officer in February. Under this new management, the company appears to be prioritizing investments in oil and gas assets, particularly in the Gulf of Mexico and US onshore shale basins where BP already has substantial operations.

The decision to sell the wind energy business reflects a departure from the strategy pursued by former CEO Bernard Looney, who had pushed for a transition away from fossil fuels. However, this green energy focus reportedly led to disappointing returns and a decline in BP's share price, which has fallen by over 20% in the past year.

"With only the exception of one shareholder, I am still to find someone who supports BP in its entirety."

This statement, made in March 2024, highlights the growing investor dissatisfaction with BP's previous green energy strategy. The company's current actions suggest a response to this pressure, as it seeks to balance its renewable energy ambitions with more traditional oil and gas investments.

BP's history with renewable energy dates back to the 1970s, and the company has made significant investments in low-carbon technologies over the years. In 2019, BP invested $500 million in such technologies. However, the current shift indicates a more pragmatic approach to energy transition, focusing on areas where the company believes it can generate the most value for shareholders.

As BP navigates this strategic pivot, it continues to operate in over 70 countries and employs approximately 65,000 people globally. The company's total revenue in 2023 was around $248 billion, underscoring its significant role in the global energy sector. While BP maintains its commitment to becoming a net-zero company by 2050, the path to achieving this goal appears to be evolving under the new leadership.