BP has said it expects to write down up to $5bn from its green and low-carbon energy businesses as it refocuses on fossil fuels under new chair Albert Manifold. The writedown, largely linked to BP’s gas and energy transition divisions, will not affect underlying profits when full-year results are published in February. BP has already cancelled hydrogen projects in the UK, Oman and Australia and is seeking to sell a stake in its solar arm, Lightsource.
The announcement comes amid weaker oil trading and falling crude prices, with Brent averaging $63.73 a barrel in the final quarter of last year. Shares in BP fell initially before recovering, following a similar trading warning from rival Shell. BP has continued to cut debt, reducing net borrowings to about $22bn–$23bn. The writedown follows the surprise appointment of Meg O’Neill as BP’s third chief executive in five years, replacing Murray Auchincloss. Analysts say the move underlines the scale of the challenge facing O’Neill as BP retreats further from the green ambitions championed by former chief executive Bernard Looney.
