BP to sell its onshore wind business

British oil and gas multinational BP Plc (NYSE:BP) announced plans to sell its US onshore wind business, saying the business is not aligned with its growth plans as it seeks to focus on its Lightsource BP solar partnership.

The company says it will launch the sale process soon for BP Wind Energy, which has interests in 10 onshore wind assets in seven US states with 1.3 GW of net generating capacity. The wind sector has been hit by several headwinds, forcing several wind companies to cancel or renegotiate power contracts due to rising material costs, high interest rates and supply chain disruptions.

“We believe the business could be worth more to another ownerWilliam Lin, BP’s executive vice president for low-carbon gas and power, said in a statement.

In November, BP announced would take full ownership of Lightsource BP, Europe’s largest solar energy developer. The company’s latest move comes as new BP CEO Murray Auchincloss has halted new offshore wind projects and imposed a hiring freeze as the company refocuses on its legacy oil and gas business amid investors’ dissatisfaction with the energy transition strategy. It also marks a sharp reversal from the direction taken by CEO Bernard Looney’s predecessor to rapidly move away from fossil fuels. The company’s greater focus on renewable energy in recent years has weighed on profits due to declining clean energy revenues at a time when oil and gas products have been rising.

Onshore wind divestment coincide with BP doubling on fossil fuels. On Monday, BP finalized a $1 billion deal with Apollo Global Management (NYSE:APO) to finance its investment in the Trans Adriatic natural gas pipeline. Apollo has now become a non-controlling shareholder of BP Pipelines TAP Limited, a BP subsidiary that holds a 20% stake in Trans Adriatic Pipeline AG. Proceeds from the deal will contribute to BP’s divestment in 2024 and other targeted proceeds of $2-3 billion.

By Alex Kimani for Oilprice.com

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