BP plans to sell its US biogas business Archaea Energy, days after confirming its exit from the North Sea, as new boss Meg O'Neill narrows the group back to core oil and gas. The move comes after second-quarter profit surged on oil prices lifted by Middle East disruption, even as BP trimmed its production outlook for the year.
BP has moved to offload Archaea Energy, its US biogas operation, just days after confirming its exit from the North Sea, as the firm shifts its focus back to core oil and gas production. The London-listed company had already told investors it planned to market assets across its operating regions as part of a restructuring led by O'Neill.
O'Neill narrows BP's portfolio
BP acquired Archaea for $4.1 billion in 2022, but the business has since underperformed financially and grown more slowly than expected, pushing BP to reassess its worth. O'Neill said the group must simplify its portfolio "based on value, not sentiment, nor history", focusing only on assets that deliver competitive returns.
The retreat has also seen BP confirm its North Sea exit, leaving it without petrochemical production in its home market for the first time in decades, alongside the earlier sales of its Gelsenkirchen refinery and its Austrian retail business. Shares rose 1.2% in early trading to 559.1p, and the stock is up 27.6% since the start of the year.
Middle East disruption lifts profit
BP's second-quarter profit surged to $5.7 billion, a $2.5 billion increase from the prior quarter, as the company benefited from volatile oil prices tied to the Middle East conflict. The result beat analyst expectations of $5.1 billion.
Its gas and low-carbon energy arm reported profit of $1.6 billion, up from $1.1 billion in the prior quarter, while oil production and operations profit climbed to $3.4 billion from $1.7 billion.
Production outlook narrows
BP expects third-quarter production to range from 2,100 to 2,250 thousand barrels of oil equivalent per day, against the second quarter's 2,201 mboe/d. That has pushed the group to cut its full-year upstream production guidance to 2,180-2,270 mboe/d, down from last year's 2,312 mboe/d.
The company pinned the outlook on continued disruption in the Middle East and the possibility of weather events in the Gulf of America. It also expects income taxes paid in the quarter to be roughly $1 billion higher, mainly due to timing effects.
Source: OilPrice.com
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