European energy company BP has announced plans to sell its U.S. onshore wind business as it aims to focus on its core oil and gas business and improve investor sentiment, the Financial Times reported.
BP, along with rival Shell, has been considering scaling back its green activities over the past few years and rejected further cuts to oil production in June 2023. Now the company is considering selling its roughly $2 billion US onshore wind portfolio, which consists of stakes in 10 operating wind farms with a total generating capacity of 1.3 gigawatts, the FT reports. Reported. (Related: “We've been overwhelmed”: Fishermen protest offshore wind after turbine failure sends debris into Atlantic Ocean)
“We believe the business has the potential to be of greater value to other owners,” said William Lin, BP's vice president for gas and low carbon energy. said Bloomberg. “This planned sale is part of our strategy to continue simplifying our portfolio and focusing on value.”
NOLAN, TX – JUNE 28: Wind turbines in a field at sunrise on June 28, 2024 in Nolan, Texas. (Photo by Brandon Bell/Getty Images)
This move was due to BP's stock price Sitting With shares nearing a two-year low, the company is in the process of “pulling capital back from transition themes to its core business,” said Viraj Borkataria, head of European energy research at RBC Europe Inc. XYZ. said And the U.S. onshore wind industry more broadly is struggling as rising interest rates and permitting difficulties slow installations, leading BloombergNEF to cut its forecast for new onshore wind capacity through 2030 by 22%.
BP's offshore wind (OSW) efforts have also faced challenges, with the company writing down the value of its OSW portfolio by $1.1 billion last year. “US offshore wind is fundamentally broken,” BP's former head of renewables Anja-Isabelle Doutzenrath told the Financial Times.
BP's rival Shell has also reversed course from a shift to renewable energy in recent years, with its CEO Wael Sawan describing cuts to oil production as “dangerous and irresponsible”.
“With all due respect, I disagree with him,” Sawan said, referring to U.N. Secretary-General Antonio Guterdaes' July 2023 comments calling new investments in oil and natural gas “economic and moral madness.” “What would be dangerous and irresponsible would be to cut oil and gas production and see the cost of living begin to rise again, as we saw last year.”
The outbreak of the Russia-Ukraine war in February 2022 caused energy prices to soar, with gasoline prices rising from about $1.80 a gallon in April 2020 to more than $5 in June 2022. According to to the Federal Reserve Bank of St. Louis.
BP did not immediately respond to a request for comment.
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