BP has announced it will write down the value of its green energy business by up to $5bn (£3.7bn), as the company shifts its focus back to fossil fuels under new chair Albert Manifold. The writedowns are mostly related to its gas and low-carbon energy divisions, but BP said this would not affect underlying profits when full-year results are reported in February.
The company has been selling a stake in its solar business Lightsource and cancelling hydrogen projects in the UK, Oman and Australia. BP’s shares fell as much as 1.4% on Wednesday after it also revealed weaker oil trading performance in the final quarter of last year.
Brent crude averaged $63.73 a barrel in the fourth quarter, down from $69.13 in the prior quarter, as oil prices recorded their steepest annual fall since the pandemic. Prices came under further pressure from Donald Trump’s capture of Venezuela’s leader and claims that US firms could rebuild its oil industry, though prices rose on Wednesday on fears of Iranian supply disruptions.
BP continued to reduce net debt to between $22bn and $23bn, down from $26bn at the end of the previous quarter. The writedown comes after BP appointed Meg O’Neill as its third chief executive in five years; she will join in April from Woodside, replacing Murray Auchincloss.
Analysts said the combination of writedowns, weak trading and lower oil prices suggests a downbeat final set of quarterly results before O’Neill takes over. Dan Coatsworth of AJ Bell noted that while this gives O’Neill a low base to build from, it illustrates the scale of the challenge ahead.
