Mark Lewis’ Post

bp has acknowledged a significant shift in its strategy toward U.S. offshore #windenergy, with a write-down of $1.1 billion in its offshore wind business, marking a retreat from ambitious plans set in 2020 for a clean energy transition. This move coincides with BP's decision to end its partnership with Equinor on three offshore wind projects, selling its stake in two and holding onto the Beacon Wind project without immediate development plans. Despite initial enthusiasm for offshore wind as a key element of its net-zero emissions goal by 2050, BP is now refocusing on oil and gas production, which is expected to increase by 2 to 3 percent annually through 2027, alongside integrating offshore wind with other renewable ventures to boost profitability. This recalibration comes amid criticisms of the U.S. offshore wind market and a broader strategy to pursue more integrated and potentially lucrative energy models, diverging from reliance on power purchase agreements. BP's CEO Murray Auchincloss emphasized a pragmatic approach, aiming to transition from an international oil company to an integrated energy company while meeting current market demands for oil and gas. https://lnkd.in/gXHTcJtX

For this week's #PGE301 post, I will discuss the effects of BP's split from Equinor and BP's increased interest in investing in oil and gas. Recently, BP split from Equinor, an energy company from Norway, with which BP had shared 3 offshore wind projects. During the split, BP sold two of the projects that it had stake in, writing down the value of its offshore wind-based units by over $1 billion. However, BP did maintain some interest in the wind energy business, since it bought the Beacon Wind project after its split with Equinor. This purchase allowed for BP to further its commitment to its goal of net-zero emission by 2050. At the same time, there has been an increased demand of energy over the recent years, and the comparatively high output of oil and gas resources relative to their clean energy counterparts has caused BP to focus more on oil and gas resources. The company hopes to increase its oil and gas production by 2 to 3 percent a year till 2027 in order to meet the increasing demand for energy.

A really helpful summary outlining BP’s net zero shift. When might we see one of the majors divest their renewables businesses? Or is this one step too far. Thanks Justin Hoffman

🌊💨 BP writes down its US offshore wind business by $1.1 billion, marking a significant shift as it prioritises oil and gas production over renewable energy. The move follows its split from Equinor, selling stakes in Empire Wind projects while gaining ownership of Beacon Wind. 🛢️CEO Auchincloss hints at incorporating wind projects into the electricity trading business but emphasises a cautious approach. Despite aiming for net zero emissions by 2050, BP shifts focus to traditional energy projects, intending to integrate offshore wind with other ventures for profitability. Auchincloss affirms plans to increase oil output, despite climate commitments, stressing a transition to an integrated energy company.

Transitions Don’t Follow Straight Lines BP's recent $1.1 billion write-down of its US offshore wind business signals a strategic shift for the oil giant. While BP made a big splash in 2020 with its net zero pledge and investments in offshore wind, its approach is changing. Here are a few key takeaways from BP's earnings call: - Focus on oil and gas growth in the near term. BP aims to increase oil and gas production 2-3% per year through 2027 to meet demand. This suggests offshore wind took a backseat to BP's traditional hydrocarbon business. - Emphasis on integrated energy models over PPAs. BP opted out of a PPA-focused model with Equinor in favor of integrated projects that pair offshore wind with green hydrogen, EV charging, etc. This allows greater profit potential. - Caution in future large offshore wind deals. BP seems wary of overpaying and says it will be more selective in US offshore wind investments after writing down $1.1B on its Equinor partnership. - Net zero goals remain, but strategy is evolving. While BP says its 2050 net zero goals are unchanged, its path there is becoming more "pragmatic." Oil and gas still dominates near-term plans. For energy companies and vendors, the implications are: - Large oil companies like BP see oil and gas remaining crucial through at least mid-decade, even as they pursue net zero. - Integrated energy models create opportunities, but offshore wind won't displace hydrocarbons soon. - The US offshore wind market has challenges to overcome before major oil players make big, lasting bets. - Partnerships between offshore wind and oil majors may take unconventional forms as business models evolve. The energy transition remains complex and uneven. As oil companies chart their own paths, flexibility and pragmatism are key. But renewables like offshore wind face a longer battle for oil majors' investment. #offshorewind #oilandgas #hydrogen #renewableenergy #getcsolutions

BP has put all new offshore wind projects on pause as the oil company’s new chief executive seeks to focus more heavily on fossil fuels. Murray Auchincloss, who became permanent head of the business at the start of the year, has also frozen hiring in the offshore wind division. The move, which was first reported by Reuters, follows investor discontent over the company’s switch to green energy. However, it is likely to trigger a backlash from climate campaigners who have waged a years-long campaign to push BP into clean energy. Mr Auchincloss is seeking to slow down investments in big budget, low-carbon projects, particularly in offshore wind, that are not expected to generate cash for years. https://lnkd.in/di5AM3iB

Storage Terminals Magazine: TotalEnergies acquires 50% stake in two offshore wind projects in the North Sea To view article please click here: https://hubs.ly/Q02Svdhc0 Does your company have news to share with the industry? Please contact: marketing@storageterminalsmag.com and we will be happy to assist. #storageterminalsmagazine #tankstorage #oil #chemicals #gas #tankterminals #bulkliquids #tanks #storagetanks #storageterminals #liquids #storageterminalsmag #news

BP (BP) is scaling back its energy transition strategy and will drop its ambitious target of cutting oil and gas production by 2030, with plans to raise its output instead, sources with knowledge of the matter told Reuters. This would mark a major shift for the oil giant at a time when its plan to boost renewables has raised concerns over profitability. Strategy pivot: Back in 2020, BP pledged to cut oil and gas production by 40% by 2030, widely seen as the sector's most ambitious target. This was scaled back last year to a 25% cut. But now, BP is looking to increase its oil and gas production, eyeing investments in three new projects in Iraq and in re-developing oilfields in Kuwait. It is moving ahead with the development of oilfields in the Gulf of Mexico and is also weighing acquiring assets in the Permian Basin. Prioritizing profits: BP has paused investment in new offshore wind and biofuel projects in recent months, and reduced the number of low-carbon hydrogen projects to 10 from 30. The move comes as clean energy projects are facing supply chain issues and rising costs amid higher interest rates. Recall that BP is targeting $2B cost savings by 2026-end. While the updated strategy is expected to be unveiled in February, the company has already dropped the 2030 production cut target in practice. Not alone: Rival Shell (SHEL) has also scaled back its energy transition strategy this year, scrapping several renewable energy projects and exiting power businesses to refocus efforts on oil and gas. In other news, the British energy giant on Monday raised its production guidance for LNG as well as upstream oil and gas.

🔺Attention LinkedIn Network🔺 🌬️ Big news in the energy industry: BP has made the decision to freeze their offshore wind projects in order to prioritize their focus on fossil fuels. The Telegraph has reported on this shift, sparking discussions about the future of renewable energy and the traditional energy sector. As the industry continues to evolve, it's crucial to stay informed on developments like this. What are your thoughts on BP's decision? How do you see the balance between renewable energy and traditional fuels shaping the future of energy? Join the conversation and share your insights using #BP #RenewableEnergy #FossilFuels. Let's keep the dialogue flowing! https://ift.tt/E1nXdv7

Exciting news on the horizon for BP as they announce a pause on their offshore wind projects. Read more about the decision in this article from The Telegraph. This move demonstrates BP's commitment to carefully evaluating their energy investments and adapting to market dynamics. #BP #offshorewind #TheTelegraph https://ift.tt/E1nXdv7