BP is clearing the decks ahead of the arrival of its new Chief Executive, Meg O’Neill, by announcing substantial writedowns in its green energy sector. The company revealed it would slash the book value of its low-carbon assets by as much as $5 billion. This financial maneuvering is widely seen as an attempt to reset the baseline before O’Neill leaves her post at Woodside to join the London-based major in April.
The writedowns are concentrated in the company’s “transition businesses,” reflecting a retreat from the aggressive green ambitions of previous leadership. Under the interim stewardship of Murray Auchincloss and the new chairmanship of Albert Manifold, the firm has already begun pivoting back toward ramping up fossil fuel production. This strategy effectively reverses the course set by former CEO Bernard Looney, who was dismissed in 2023.
Market analysts suggest that while the writedowns paint a grim picture of the company’s recent renewable ventures, they provide O’Neill with a “low base” from which to build. By acknowledging these losses now, the company protects the incoming CEO from having to declare them early in her tenure. However, the move also highlights the immense scale of the challenge she faces in balancing profitability with long-term energy trends.
Beyond the internal restructuring, BP is navigating a turbulent global market. The average price of Brent crude fell to $63.73 a barrel in the fourth quarter, putting pressure on revenues. Additionally, the company’s oil trading arm posted a weak performance, adding to the headwinds. Despite this, the company has managed to reduce its net debt significantly, dropping from $26 billion to roughly $22-$23 billion.
The broader sector is also facing instability. Competitors like Shell and Exxon recently canceled a major asset sale in the North Sea due to changing commercial conditions. As O’Neill prepares to take the “hot seat,” she will have to navigate these industry-wide hurdles while executing the company’s renewed focus on its traditional oil and gas strengths.