BP to offload biogas unit
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BP said Tuesday morning that it's planning to sell Archaea, which captures and sells gas from landfills and dairy farms, just four years after buying it for $4.1 billion.
Why it matters: It's a major move in BP's pivot back to its core oil and gas business, and a streamlining of operations, to boost financial performance that has lagged rivals.
- Archaea is the largest producer of renewable natural gas in the U.S., according to BP.
- But the company has written down Archaea's value a lot since the acquisition, Morningstar notes.
Zoom out: The announcement came in BP's second-quarter earnings rollout, where it became the latest oil major to report a profit surge amid the Iran crisis that has boosted commodity prices.
- BP reported $5.7 billion in Q2 profit, which is $2.5B above the prior three months.
Catch up quick: New CEO Meg O'Neill is accelerating BP's turn away from its climate transition plan launched in 2020, and more broadly looking to sharpen its focus.
- That extends well beyond its retreat from renewables. Just last week, for instance, BP said it's putting its North Sea oil and gas assets up for sale after operating there for over a half-century.
What's next: On Tuesday morning, O'Neill laid out five priorities to deliver a "step change" in performance, including more simplification of BP's portfolio and investing with "greater discipline."
