British oil and gas multinational BP Plc (NYSE:BP) has announced plans to sell its onshore wind business in the U.S., 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 shortly for BP Wind Energy, which has interests in 10 operating onshore wind energy assets across seven U.S. states with net generating capacity totaling 1.3 GW. The wind sector has been hit with several headwinds, forcing multiple wind companies to cancel or renegotiate power contracts thanks to soaring materials costs, high interest rates, and supply chain disruptions.
"We believe the business is likely to be of greater value for another owner," William Lin, BP's executive vice president for gas and low carbon energy said in a statement.
Back in November, BP announced it would take full ownership of Lightsource BP, Europe's largest solar energy developer. The company's latest move comes at a time when BP's new CEO Murray Auchincloss has paused new offshore wind projects and imposed a hiring freeze as the company re-orients to its legacy oil and gas business amid investor discontent over its energy transition strategy. It also marks a stark reversal from the direction the CEO's predecessor Bernard Looney took to rapidly move away from fossil fuels. The company's greater focus on renewable energy in recent years has weighed on profits due to shrinking returns by clean energy at a time when oil and gas products surged.
The onshore wind divestment coincides with BP doubling down on fossil fuels. On Monday, BP finalized a $1B agreement 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 in BP Pipelines TAP Limited, a BP subsidiary that holds a 20% stake in Trans Adriatic Pipeline AG. Proceeds from the transaction will contribute to BP's 2024 divestment and other proceeds target of $2B-3B.
By Alex Kimani for Oilprice.com
Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. More