In a surprising move, British energy giant BP has announced that it expects to write down the value of its struggling green energy businesses by as much as $5 billion (£3.7 billion), as it refocuses its efforts on traditional fossil fuels under the leadership of its new chair, Albert Manifold.
The company stated that the writedowns are mostly related to its gas and low-carbon energy divisions within its “transition businesses”, but reassured that this would not impact its underlying profits when it reports its full-year results in February.
BP’s shift away from its previous green energy ambitions comes amidst a challenging market environment. The oil company has been trying to sell stakes in its solar business, Lightsource, and has cancelled hydrogen projects in the UK, Oman and Australia. This strategic pivot follows the recent appointment of Meg O’Neill as the company’s new CEO, the first female head of a leading oil company.
The writedowns also come on the heels of weaker oil trading performance and a drop in oil prices. BP said the average price of Brent crude was $63.73 per barrel in the fourth quarter of last year, down from $69.13 per barrel in the prior quarter. Oil prices recorded their steepest annual fall since the COVID-19 pandemic in 2025, slumping by almost 20%, and further declines are expected as producers continue to pump more crude than is required by the global economy.
Adding to the industry’s woes, recent geopolitical tensions have also put pressure on oil prices. The capture of Venezuela’s leader, Nicolás Maduro, by former US President Donald Trump, and his claim that US oil companies are poised to rebuild the South American country’s oil industry, have fueled fears of a global supply glut.
However, oil prices did rise on Wednesday, up 1.4% to $66.39 per barrel, amid concerns of potential supply disruptions from Iran due to a possible US attack and potential retaliation.
Despite the challenges, BP said it continues to slash its debt, reducing net debt to between $22 billion and $23 billion at the end of the quarter, compared to $26 billion at the end of the previous three months.
The writedowns and the company’s shifting focus have raised concerns about the scale of the challenge facing incoming CEO Meg O’Neill. “Put the writedowns together with a weak showing for its oil trading arm and the impact from weaker oil prices, [it] looks like the final set of quarterly results before Meg O’Neill steps into the hot seat in April will be downbeat,” said Dan Coatsworth, the head of markets at the broker AJ Bell.
However, Coatsworth noted that this could also provide O’Neill with a low base from which to build, as she aims to steer BP through these turbulent times and revive the company’s fortunes.
