If one thinks that renewable energy is the future, then s/he can be surprised with a new decision made by BP Plc. Surprising or not, BP Plc has informed that it wants to get rid of its US wind arm. The sale of the US wind farm assets will close a chapter in the BP’s history of involvement in renewable energy which is also named the fuel of the future. The company intends to fully focus on its oil and gas projects as they are most profitable.
End of BP’s adventure with renewable energy
An almost decade-long adventure with renewable energy is coming to an end. Indeed, it was only in 2005 when then-BP CEO Lord John Browne of Madingley decided that the energy giant should enter unknown territories of wind, solar and hydrogen power. However, since those days, everything has changed. Just in 2011, BP Plc opted out of solar power investments, shutting panel plants.
And these days BP Plc is opting out of its US wind arm… According to analysts’ estimates, the UK-based oil and gas Company might even get as much as $1.5 billion for these assets. Not surprisingly, BP Plc did underline in a statement that it did not put any price tag on its US wind arm, yet it highlighted that it would wait for interesting offers. Certainly, the sale offer is attractive to potential buyers as it consists of shares in several operating wind farms with a cumulative capacity of roughly 2,600 megawatts, not to mention other investments as well.
BP Plc wants to opt out of its US wind arm as it is no longer interested in investing in renewable energy. The fact is that the uncertain future of government subsidies and prices have been rather daunting. In addition, the recently-observed increases in prices for oil have been luring oil companies to again repose hope in conventional sources of energy. Therefore the BP’s sale of its US wind arm is not surprising at all.
Analysts are convinced that the sale of BP’s US wind arm will be without a doubt attractive to many companies, including Asian businesses. The purchase would certainly give Chinese companies an access to the wind market, not to mention that it would certainly strengthen the purchaser’s position also globally. For a long time, China-based companies have been much interested in US renewable energy assets. However, there is one main obstacle on the road of Chinese expansion into the market as American authorities are not too much keen on approving any takeovers or other deals which might have any security implications or which might pose a threat to the vital interests of the US.
After the sale, BP Plc will have to settle for its significant investments in Brazilian biofuels – the only assets left from renewable energy sector. Also these investments were made during the tenure of Lord John Browne who aimed to take BP Plc well “beyond petroleum.” It seems that the company will not invest any more in renewable energy in the nearest future.
Prosaic reasons for sale
Main reasons for the upcoming sale of the US wind arm were presented above, including issues revolving around government subsidies, not satisfactory prices for renewable energy and increases in prices for oil. All of them pushed BP Plc to sell its last assets related to wind energy.
But the fact is that there is one more reason for the sale! The company is almost desperately seeking ways to raise money to pay oils spill damages. And what is important is the fact that the company has a clear and visible plan for the future, it wants simply to concentrate on its oil and gas operations.
