BP has warned it will take a hit of up to $5bn as it writes down the value of its struggling green energy operations while refocusing on fossil fuels. The move comes under the leadership of new chair Albert Manifold and reflects a broader retreat from BP’s previous low-carbon ambitions. The company said the writedowns relate mainly to its gas and low-carbon transition businesses but will not affect underlying profits when full-year results are published in February.
BP has already scaled back its renewables push by seeking to sell a stake in its Lightsource solar unit and cancelling hydrogen projects in the UK, Oman and Australia. Shares fell after the update, alongside news of weaker oil trading and lower crude prices. Brent crude averaged $63.73 a barrel in the final quarter, down from the previous quarter, amid a sharp annual fall in oil prices and fears of oversupply.
The strategic reset follows the appointment of Meg O’Neill as BP’s new chief executive, due to take over in April from Murray Auchincloss. Analysts said the writedowns, weaker trading and softer oil prices point to a subdued handover period but could give O’Neill a low base from which to rebuild. The update came as rival Shell also warned of weaker trading conditions and pulled out of a planned North Sea gas asset sale, underlining the pressures facing the oil and gas sector.
