Key facts
- BP is selling its US biogas business, acquired for $4.1 billion in 2022.
- The company recently exited its North Sea operations.
- BP aims to simplify its portfolio and focus on core oil and gas products.
- Second-quarter profits surged to $5.7 billion, exceeding analyst expectations.
- The company lowered its full-year upstream production outlook.
BP has announced the sale of its US biogas business, a move that follows its recent exit from North Sea operations. The company, under new leadership, is restructuring to focus on core oil and gas products and divest underperforming assets. BP acquired the US biogas business, Archaea, for $4.1 billion in 2022, but it has since experienced financial underperformance and slower growth than anticipated.
CEO Meg O’Neill stated the need to simplify the portfolio based on value and competitive returns, moving away from sentiment or historical investments. This strategic shift includes splitting the group's energy channels into upstream and downstream divisions. Last week, BP confirmed its departure from the North Sea, marking its first time in decades without petrochemical production in its home market, and also sold its Gelsenkirchen refinery and Austrian retail business.
O’Neill acknowledged that the company's performance has not met expectations, citing inconsistent delivery, written-off value, and costs not resilient in a low-price environment. Despite these divestments, BP reported a significant surge in second-quarter profits to $5.7 billion, surpassing analyst expectations of $5.1 billion. The gas and low carbon energy arm reported profits of $1.6 billion, while oil production and operations saw profits climb to $3.4 billion.
Looking ahead, BP anticipates third-quarter production to be between 2,100 and 2,250 thousand barrels of oil equivalent per day (mboe/d), leading to a reduction in its full-year upstream production outlook. The company cited continued disruption in the Middle East and potential weather events in the Gulf of America as factors influencing its forecast. BP also expects income taxes paid in the quarter to be approximately $1 billion higher due to timing effects.