BP has announced the sale of its US biogas business just days after confirming a full exit from the North Sea, marking a dramatic acceleration of its restructuring programme.
The London-listed oil giant acquired Archaea for $4.1bn in 2022, but the business has since suffered financial underperformance and slower than expected growth.
New chief executive Meg O’Neill is overseeing the overhaul, which aims to strip back the group’s sprawling portfolio and return focus to core oil and gas operations.
O’Neill said the firm must simplify its portfolio “based on value, not sentiment, nor history” and instead focus on assets which “deliver competitive returns and long-term value.”
She has previously outlined plans to split the group into two divisions, dubbed upstream and downstream, concentrating solely on profitable assets across both.
Last week, BP confirmed its North Sea exit, leaving the British energy giant without petrochemical production in its home market for the first time in decades.
The group also sold its Gelsenkirchen refinery and its retail business in Austria as part of the same wave of divestments.
O’Neill has been candid about the company’s recent struggles, stating: “We are not making the most of our potential. Our performance over the past few years has not met our own expectations, let alone those of our shareholders.”
She added: “We have not delivered consistently; we have written off too much value; and our costs and liabilities are not resilient enough in a low price environment.”
Despite the structural challenges, BP reported a strong second quarter, with profits surging to $5.7bn, a $2.5bn increase from the prior period, surpassing analyst expectations of $5.1bn.
The firm’s gas and low carbon energy arm posted profits of $1.6bn, up from $1.1bn the previous quarter, while oil production and operations saw profit climb to $3.4bn from $1.7bn.
Volatile oil prices driven by ongoing Middle East conflict have contributed significantly to the improved financial performance across BP’s trading operations.
Looking ahead, BP anticipates third quarter production ranging from 2,100 to 2,250 thousand barrels of oil equivalent per day, compared to 2,201 mboe/d recorded in the second quarter.
The group has lowered its full-year upstream production expectations to between 2,180 and 2,270 mboe/d, down from last year’s 2,312 mboe/d.
BP attributed the revised outlook to “continued disruption in the Middle East” and the potential for “weather events in the Gulf of America” affecting operations.
The group also expects income taxes paid in the coming quarter to be roughly $1bn higher, citing “mainly timing effects” as the primary driver.
O’Neill struck a resolute tone on the path forward, saying: “We need to take a clear look at ourselves: assessing what needs to change, stopping what holds us back and building strength where it matters. We have to get fit to grow.”