BP has announced the sale of its U.S. onshore wind business to LS Power, a U.S.-based energy company, as part of its divestment strategy. The deal, which does not disclose a specific value, will see BP Wind Energy now owned and operated under LS Power’s Clearlight Energy.
Amid criticism from investors for its recent underperformance, BP is undergoing a strategic revamp to cut debt, increase cash flow, and pivot back to oil and gas following a failed venture into renewables. The company aims to generate $3 billion to $4 billion in disposals by the end of the year, with plans to divest $20 billion worth of assets by 2027 under CEO Murray Auchincloss’ leadership.
HSBC analyst Kim Fustier noted the unusual absence of consideration in the press release, suggesting that the portfolio’s value may be lower than typical multiples for onshore wind assets. Another disposal may be necessary to meet this year’s disposal target.
In addition to the wind business sale, BP recently struck a $1 billion deal with Apollo Global Management to sell its stake in a firm invested in the TANAP gas pipeline connecting Azerbaijan and Turkey. The agreement includes 10 operational wind assets with a combined gross generating capacity of 1.7 gigawatts, expanding Clearlight Energy’s operating fleet to approximately 4,300 megawatts.
Following the announcement, shares of BP saw a 1.9% increase, reflecting a broader trend of energy companies benefiting from rising oil prices. The company’s decision to streamline its operations and focus on core assets is seen as a strategic move to drive growth and enhance shareholder value.
This latest divestment aligns with BP’s commitment to reshaping its portfolio and optimizing its business for long-term sustainability and profitability. The company’s strategic realignment reflects a shift towards a more streamlined and efficient operation, positioning BP for success in a rapidly evolving energy landscape. With LS Power’s acquisition of BP’s U.S. onshore wind business, both companies are poised to capitalize on the growing demand for renewable energy solutions and drive innovation in the energy sector.
