Key facts
- BP expects impairment charges of $4 billion to $5 billion in Q4 2025.
- The charges are primarily related to BP's gas and low-carbon energy division.
- BP has cut renewable energy investments from over $5 billion annually to $1.5-2 billion.
- Oil and gas spending will increase to $10 billion per year.
- BP's offshore wind investments, particularly in the US, have faced escalating costs and delays.
- BP has cancelled several hydrogen projects.
BP is preparing for a significant financial hit, with impairment charges expected to range between $4 billion and $5 billion in the fourth quarter of 2025. These charges are primarily linked to the company's gas and low-carbon energy division, signaling a major pivot away from its previous aggressive green transition targets.
The announcement underscores a broader industry trend of energy majors reassessing their commitments to renewables, driven by shareholder pressure for returns, lower-than-expected profits from green projects, and rising costs. BP's strategic reset, unveiled in February 2025, slashed annual renewable energy investments from over $5 billion to $1.5-2 billion, while simultaneously increasing spending on oil and gas to $10 billion per year.
Specific projects contributing to the write-downs likely include troubled offshore wind investments, particularly in the US, which have been plagued by escalating costs, supply chain disruptions, and regulatory delays. Solar projects have also faced challenges, including supply chain issues and compressed profit margins. BP has also cancelled several hydrogen projects and is attempting to attract new partners for its solar arm, Lightsource.
BP's share price fell 1.6% following the announcement, with its market value reaching £67 billion. The company's previous chief executive, Murray Auchincloss, had stated that BP had gone "too far, too fast" in its transition away from fossil fuels, a sentiment that appears to have guided the current strategic direction.