Investment promises renewed by BP as earnings surpass projected figures
BP, the British multinational oil and gas company, has revealed plans to conduct a strategic portfolio review focusing on divesting non-core assets to realign its business towards traditional oil and gas. This move is part of a broader $20 billion asset sale plan through 2027, with $3-$4 billion in divestments targeted for 2025.
The company's CEO, Murray Auchincloss, has reaffirmed these plans and discussed them with incoming Chair Albert Manifold. The review will guide the allocation of BP's $13-$15 billion annual investment budget, ensuring that resources are directed towards its core operations.
One of the key divestment activities announced is the sale of BP's U.S. onshore wind business to LS Power. This unit, known as bp Wind Energy, includes 1.7 GW of wind assets across 10 projects in seven states. The transaction, expected to close by the end of 2025 after regulatory approvals, will see BP divest 1.3 GW owned by the company.
BP's 2025 divestment guidance has been updated to $3-$4 billion, with $1.5 billion already signed or completed by mid-2025. The total divestment target is approximately $20 billion through 2027.
Other assets under consideration for sale include BP's Castrol lubricants business, the Gelsenkirchen refinery in Germany, and stakes in solar and battery storage units like Lightsource BP. BP has already sold other assets such as fueling stations in the Netherlands and Austria and a $1 billion stake in the TANAP gas pipeline.
The strategic focus of this portfolio review is to improve shareholder returns by reducing debt, cutting costs, and concentrating on upstream oil and gas production rather than renewables. This move comes after pressure on previous CEO, Helge Lund, for supporting BP’s pivot to renewables.
BP's shares were up 2.6% at 1032 GMT, outperforming the European energy index. The company's second-quarter adjusted net income of $2.4 billion was ahead of analysts' average forecast of $1.8 billion. BP's gas and low-carbon earnings also exceeded expectations.
The company's quarterly performance was boosted by a 33% profit increase at its customers and products division. Brent crude oil averaged $67 per barrel in April-June, down from $75 in the previous quarter and $85 a year earlier.
BP has new projects in Azerbaijan, Iraq, Libya, and Abu Dhabi, and exploration successes in Namibia and Brazil. The company also plans to repurchase $750 million in shares before the third-quarter results.
Sources:
[1] BP agrees to sell U.S. onshore wind business to LS Power for $1.7 billion. (2025). Retrieved from https://www.reuters.com/business/energy/bp-agrees-sell-us-onshore-wind-business-ls-power-1-7-billion-2025-07-01/
[2] BP Plans to Sell Castrol Lubricants Business. (2025). Retrieved from https://www.wsj.com/articles/bp-plans-to-sell-castrol-lubricants-business-11635545083
[3] BP's Portfolio Review: What's in Store for the Oil Giant. (2025). Retrieved from https://www.ft.com/content/e6d4d2e4-d0d5-490b-842e-9f97e65c2927
[4] BP to Divest $20 Billion in Assets by 2027. (2025). Retrieved from https://www.bloomberg.com/news/articles/2025-02-01/bp-to-divest-20-billion-in-assets-by-2027
[5] BP's Net Debt Falls by $1 Billion to $26 Billion. (2025). Retrieved from https://www.reuters.com/business/energy/bps-net-debt-falls-1-billion-26-billion-2025-04-28/
- The strategic review by BP will guide the allocation of their annual investment budget, ensuring resources are directed towards traditional oil and gas operations in the finance industry, rather than renewable energy units like their Castrol lubricants business and solar and battery storage units.
- In addition to the sale of BP's U.S. onshore wind business, the company is considering divesting other non-core assets such as the Gelsenkirchen refinery in Germany, stakes in solar and battery storage units, and their Castrol lubricants business, all aimed at raising approximately $20 billion through 2027.
- While BP has already sold assets such as fueling stations in the Netherlands and Austria and a $1 billion stake in the TANAP gas pipeline, the company's focus on divesting non-core assets and realigning towards traditional oil and gas is part of a broader $20 billion asset sale plan, with $3-$4 billion in divestments targeted for 2025, in an effort to cut costs, reduce debt, and improve shareholder returns.
