Deep in the Oman desert lies one of BP’s more lucrative projects, a mass of steel pipes and cooling towers that showcases the British energy giant’s pioneering natural gas extraction technology.

The facility earned BP Plc more than $650 million in profits in 2019, according to financial filings reviewed by Reuters. Yet the oil major agreed to sell a third of its majority stake in the project earlier this year. The deal exemplifies a larger strategy to liquidate fossil-fuel assets to raise cash for investments in renewable-energy projects that BP concedes won’t make money for years.

BP’s big bet is emblematic of the hard choices confronting Big Oil. All oil majors face mounting pressure from regulators and investors worldwide to develop cleaner energy and divest from fossil fuels, a primary source of greenhouse-gas emissions that cause global warming. That scrutiny has increased since early August, when the United Nations panel on climate change warned in a landmark report that rising temperatures could soon spiral out of control.

BP Chief Executive Bernard Looney, who took office in February 2020, is gambling that BP can make the clean-energy transition much faster than its peers. Last year, he became the first major oil CEO to announce that he would purposely cut future production. He aims to slash BP’s output by 40%, or about 1 million barrels per day, an amount equal to the UK’s entire daily output in 2019. At the same time, BP would boost its capacity to generate electricity from renewable sources to 50 gigawatts, a 20-fold increase and equivalent to the power produced by 50 U.S. nuclear plants. 

(For a graphic on BP’s clean-energy investment plans, see

To hit those targets, Looney plans $25 billion in fossil-fuel asset sales by 2025. That’s equivalent to about 13% of the company’s total fixed assets at the end of 2019. Under his watch, BP has already sold legacy projects worth about $15 billion. In addition to the Oman deal, Looney unloaded oil and gas fields in Alaska and the North Sea and sold off BP’s entire petrochemical operation, which produced a $402 million profit in 2019.

Two of BP’s key renewables investments, by contrast, are losing tens of millions of dollars, according to a Reuters review of financial filings with Companies House, Britain’s corporate registry. BP owns half of Lightsource, a solar energy company that lost a combined 59.3 million pounds ($81.8 million) in 2018 and 2019, the last year for which data is available. The company’s UK-based electric-vehicle charging firm, bp pulse, lost a combined 22.3 million pounds ($30.8 million) over the two years.

Performance figures for other assets recently bought or sold by BP are not available because, like other oil majors, it does not usually disclose the financials of individual projects. The performance numbers for the two renewable projects and the Oman unit have not been previously reported. BP did not give Reuters updated financials for those projects or others beyond 2019.

The company acknowledged that its fast-growing clean-energy business – including its solar, EV-charging and wind ventures – continues to lose money. BP does not expect profits from

those businesses until at least 2025.

The losses are not slowing Looney’s spending on renewable energy. He aims to boost annual investment to $5 billion by 2030, a 10-fold increase over 2019. For bp pulse, that means operating 70,000 charging points by 2030, up from 11,000 now. Lightsource, meanwhile, recently completed a $250 million solar farm in rural north Texas and, separately, acquired a U.S. solar company for $220 million. BP is also moving aggressively into offshore wind power, and paying a high cost of entry relative to companies who got established in the business earlier.

As he launched the transition, Looney has slashed jobs, cutting 10,000 employees, or about 15% of the workforce he inherited. BP’s share price, meanwhile, has fallen 39% since Looney arrived, the worst performance by any oil major during the period. (For a graphic comparing BP share prices to other oil majors, see

In an interview with Reuters, BP Chief Financial Officer Murray Auchincloss dismissed the importance of the company’s recent share performance and said BP and its investors can weather the rapid transformation.

The declining oil-and-gas revenue this decade will be offset, in part, by higher expected revenues from gasoline stations and their attached convenience stores, he said. Those stations will increasingly offer electric vehicle charging, a business Auchincloss said is growing much faster than BP had expected, especially in Europe, because of plans by automakers including BMW and Daimler AG, the parent company of Mercedes-Benz, to introduce more electric models.


Please enter your comment!
Please enter your name here