BP plans to sell some of its assets to invest in renewable energy

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BP is preparing to sell a large part of its oil and gas assets, with the aim of investing more money in renewable energy, even if crude prices recover after the collapse caused by Covid-19, according to informed sources.
The sources explained that the strategy was subject to discussion during a meeting of the company’s executives last July, right after the oil giant lowered its long-term forecast for the price of crude to $ 55 a barrel, which means that $ 17.5 billion of its assets is no longer the same. Economic feasibility.
According to “Reuters”, it is unlikely that “BP” will re-list these assets in its exploration plans, even if crude prices rebound towards $ 65 to $ 75 a barrel, but rather it will take advantage of improved market conditions to sell them.
Major oil companies usually hold assets for long periods, even when crude prices plummet, aiming to run more low-margin production when market conditions improve.
But BP’s new exit plan, which has not been announced before, will close the return line to the British energy company as soon as it sells oil and gas assets that are described as pending. BP did not respond to requests for comment.
The new strategy also sheds more light on CEO Bernard Looney’s plan to reduce BP’s production of oil and gas by 40 percent, or at least one million barrels per day, by 2030 in conjunction with an expansion in renewable energy.
A BP source said, “The issue is a simple matter of calculating the natural decline in production and the planned exit,” explaining how BP became the first major oil company to pledge to significantly reduce its crude production.
For decades, BP and rivals such as Royal Dutch Shell and ExxonMobil had promised investors that production would continue to increase.
But with the industry facing pressure from climate activists, investors, banks and some governments to curb emissions in order to contribute to lowering the planet’s temperature, European oil companies are changing their approach and pledging to invest more in renewables.
In contrast, US competitors are facing less government pressure and have not made similar pledges on renewables. And Lonnie said earlier this week, “When we check BP’s forecast for the next few years and see production decline by 40 percent, it is clear that we no longer need exploration to finance new growth, we will not enter new countries to do exploration.”
He said that “BP” will continue to explore for oil near its existing production structure, because these barrels will be low-cost, and will help to enhance the company’s cash flows in order to finance the shift towards clean energy.





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