Before the departure of former Chief Executive Lord Browne in 2007, BP (NYSE: BP) invested heavily in alternative energy projects as part of its ‘Beyond Petroleum’ strategy. Since then the British energy company has abandoned this strategy, in favour of a higher focus on oil and gas, where it believes greater margins exist.
It exited the wind sector in Europe, and then near the end of last year announced that it would also sell its solar business. The final nail in the coffin to their original renewable energy plan is delivered by their announcement to now sell all US wind farm assets.
A company statement read: “BP has decided to market for sale our US wind energy business as part of a continuing effort to become a more focused oil and gas company and re-position the company for sustainable growth into the future. For BP, this effort represents another example of prudent and active management of our global portfolio, consistent with our pledge to unlock more value for shareholders.” (Related article: Has Belgium Cracked the Problem of Storing Wind Power Electricity?)
Whilst the sale is part of the strategy to focus on the core oil and gas business, it also forms part of the program to raise $38 billion from assets sales in order to cover the costs that BP is facing from the fallout of the 2010 Deepwater Horizon spill in the Gulf of Mexico.
BP controls interests in 16 operational wind farms with a capacity of 2.6GW, and another 2GW in wind farms still under development. It is one of the largest wind energy portfolios in the US, and analysts suggest that it should fetch around $1.5 billion.