BP plans up to $5bn writedown as it pivots away from green energy and back to fossil fuels

The Guardian
The Guardian
4d ago
BP reported plans for a $4bn–$5bn writedown in its transition businesses while cutting net debt and preparing for a CEO change as oil trading and oil prices weakened.
BP plans up to $5bn writedown as it pivots away from green energy and back to fossil fuels
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Key insights

  • 1

    Writedown does not change BP’s stated underlying profit outlook: BP said wiping between $4bn and $5bn off the value of its transition businesses would not affect its underlying profits when it reports full-year results in February.

  • 2

    Analyst expects a downbeat quarter before the new CEO starts: AJ Bell markets head Dan Coatsworth said the combination of writedowns, weak oil trading, and weaker oil prices suggests the final quarterly results before Meg O’Neill starts in April will be downbeat, and he said it illustrates the scale of the challenge in front of her.

A What happened
BP said it expects to write down between $4bn and $5bn from its gas and low-carbon energy divisions in its transition businesses as it refocuses on fossil fuels under chair Albert Manifold. BP said the writedown would not affect underlying profits when it reports full-year results in February, and it has been trying to sell a stake in its solar business Lightsource while cancelling hydrogen projects in the UK, Oman and Australia. BP said oil trading was weaker in its final quarter and that Brent crude averaged $63.73 a barrel in the fourth quarter versus $69.13 in the prior quarter. BP said net debt fell to between $22bn and $23bn at quarter end from $26bn at the end of the previous three months.

Topics

Business & Markets Markets Climate & Environment Energy Energy Transition

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