PVTIME – BP plc, the UK-based global fossil fuel titan, recently unveiled a major ‘strategy reset’ that signals a significant departure from its previous renewables-centric trajectory. This new strategic direction will see the company refocus on its upstream oil and gas operations, with the aim of producing high-margin energy products. At the same time, BP announced its intention to sell its stake in its solar subsidiary, Lightsource bp.
In October 2024, BP acquired full ownership of Lightsource bp. At the time, Lightsource bp had an impressive pipeline of 62GW of solar PV projects in 19 international markets. The initial aim was to secure low-carbon, cost-effective electricity for BP’s operations. But just five months after the acquisition, BP has shifted gears. It now plans to bring in external partners to drive Lightsource BP’s growth. Meanwhile, BP is eyeing a significant $20 billion windfall from a strategic overhaul of its long-established lubricants business, Castrol.
BP has earmarked $10 billion a year to invest in its oil and gas business until 2027. This is in stark contrast to its renewable energy investment, which will be slashed to a range of $1.5-2 billion, a far cry from the $5 billion previously planned.
Going forward, BP will adopt a more disciplined investment philosophy. It will make relatively modest investments in world-class offshore wind and solar platforms. At the same time, it intends to limit further investment in areas such as hydrogen and carbon capture. Reuters reports that BP’s strategic pivot is partly a response to its lagging performance compared to rivals such as Shell and ExxonMobil. In addition, US activist investor Elliott Investment Management, which has acquired a 5% stake in BP, is pressuring the company to divest assets, particularly in the low-carbon segment, while also advocating cost-cutting measures and performance transformation.
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