BP is considering selling a minority stake in its offshore wind business, according to four sources with knowledge of the matter, the latest effort by CEO Murray Auchincloss to scale back the energy company's focus on renewables.
The company has faced pressure from shareholders over its energy transition strategy, first launched in 2020, as renewables profit thinned while margins from oil and gas rose.
The London-listed oil company has lined up Bank of America to find partners for the business, the sources said, speaking on condition of anonymity because the process is private. BP wants to reduce its share of the hefty investments required to develop these projects, two of the sources said.
A spokesperson for BP declined to comment.
BP remains committed to developing its major offshore wind projects, one source said. The company has also invested in solar, biofuels and low-carbon hydrogen in recent months.
Auchincloss, who took up the job in January, has vowed to revamp the company's plans to focus on the high-margin businesses, distancing himself from predecessor Bernard Looney's strategy to rapidly expand renewables and reduce oil and gas output.
Reuters reported in June, citing sources, that the company paused investments in new offshore wind projects. Last month, BP said it plans to sell its U.S. onshore wind business.
The CEO has also said BP would sell a stake in its solar joint venture Lightsource BP once it completes its full acquisition in the coming months.
Sources told Reuters earlier this month that BP has abandoned its flagship target to reduce oil and gas production by 25% between 2019 and 2030, though it remains committed to its ambition to reduce carbon emissions to net zero by 2050.
"As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company," a BP spokesperson said at the time.
BP shares rose 1.15% on Thursday.
BP currently does not have any offshore wind farms in operation. The offshore business has stakes in projects in Britain, Germany, the United States and Asia, and had a pipeline of projects with a capacity of 9.6 gigawatt at the end of June.
Last year, BP won the rights to develop, build and operate two plants in Germany with 4 GW capacity. BP committed to paying 6.7 billion euros ($7.27 billion) over a 20-year period when the projects become operational in the next decade.
In Britain, BP is also developing with its partner EnBW three windfarms in the Irish Sea and the North Sea with a combined capacity of 5.9 gigawatts.
The rapidly-growing offshore wind sector has had a tough few years as costs ballooned due to technical and supply chain problems as well as higher interest rates, leading many companies to review investments.
BP last year took an impairment of $1.1 billion related to its U.S. offshore wind projects, based on the company's annual statement. It later broke up a U.S. offshore wind joint venture with Norway's Equinor.
Other companies are also reconsidering their investments in offshore wind, or have assumed impairments, due to the rising cost of developing wind farms that can be more than 100 kilometres offshore.
Macquarie has marked its offshore unit Corio for sale, Reuters has previously reported, and Orsted, the world's biggest offshore wind farm developer, trimmed its investment and capacity targets earlier this year.
(Reuters - Reporting by Andres Gonzalez, editing by Jane Merriman)