LONDON, Sept 20 — 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.
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 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 over the two years.
As he launched the transition, Looney has slashed jobs, cutting 10,000 employees, or about 15 per cent of the workforce he inherited. BP’s share price, meanwhile, has fallen 39 per cent since Looney arrived, the worst performance by any oil major during the period. Seven current and former BP executives spoke with Reuters on condition of anonymity and shared their views on Looney’s transition plan. The executives generally supported the direction but expressed varying levels of concern that Looney is moving too fast in trading high-quality oil assets for more speculative renewable-energy investments.
BP spokesman David Nicholas said the company has been “strictly disciplined” in choosing renewable investments that meet certain financial criteria and will allow Looney to continue hitting corporate profit targets. This time, BP is going beyond investing in renewables; it’s unloading core oil and gas assets. The Oman project is among the world’s largest natural-gas fields, and BP reported to Companies house that the field earned a 17 per cent return on capital deployed in 2019.
Soon after, on February 1, BP announced the agreement to sell part of its stake in the Oman gas field for US$2.6 billion to Thailand’s PTT Exploration and Production. BP gave up a third of its 60 per cent ownership — or 20 per cent of the whole project — in the deal. That sale and others helped BP cut debt to US$33 billion by the end of March. The effort was also aided by rising oil and natural gas prices.
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