Energy major BP is exploring the sale of a minority stake in its offshore wind business, Reuters news report said.
This move reflects strategy of BP CEO Murray Auchincloss to scale back the company’s investments in renewables, as BP faces increasing pressure from shareholders over its energy transition strategy.
BP has enlisted Bank of America to help find potential partners for the sale, with the aim of reducing its financial exposure to the substantial investments required for offshore wind projects. Despite this, BP remains committed to its existing offshore wind projects, which span across Britain, Germany, the United States, and Asia.
The company’s focus on wind energy has been under scrutiny in recent months, especially as the profitability of renewables dwindles compared to BP’s rising margins from oil and gas. Earlier this year, BP announced a halt on investments in new offshore wind projects and recently revealed plans to sell its U.S. onshore wind business.
Murray Auchincloss has been steering the company toward higher-margin oil and gas ventures, deviating from former CEO Bernard Looney’s aggressive push into renewables.
BP’s current offshore wind portfolio includes projects in Germany, where it plans to develop two wind farms with a combined capacity of 4 gigawatts (GW), and in Britain, where it is collaborating with EnBW on three projects with a total capacity of 5.9 GW. However, the offshore wind sector has faced challenges in recent years due to rising costs, supply chain issues, and higher interest rates, prompting companies like BP and others to reassess their investments.
Murray Auchincloss’s strategic pivot includes selling a stake in BP’s solar joint venture, Lightsource BP, once the company completes a full acquisition of the entity in the coming months. Additionally, BP has recently adjusted its long-term targets, abandoning its plan to cut oil and gas production by 25 percent by 2030, while maintaining its goal to achieve net-zero carbon emissions by 2050.