BP braces for hit of up to $4.5bn in pivot from green energy
BP is bracing for a hit of up to $4.5bn after a hefty write-down in its energy transition unit, as the firm pivots away from aggressive green targets. The FTSE 100 energy giant told markets on Tuesday its third quarter update – set for the end of the month – would include a post-tax impairment [...]
BP, the FTSE 100 energy giant, is anticipating a potential $4.5 billion hit following a significant write-down in its energy transition unit as the firm shifts focus away from aggressive green energy targets. The company has disclosed that its third-quarter update, expected at the end of the month, will include a post-tax impairment charge ranging from $3 billion to $4.5 billion. BP attributes these charges primarily to its transition businesses in the gas and low-carbon energy segment.
The company recently lowered its planned transition capital expenditure by over $5 billion annually, setting a target of up to $2 billion. In the final quarter of 2025, BP predicted write-downs of between $4 billion and $5 billion after reassessing its strategy for transition assets and partnerships in the gas and low-carbon sector. To align with this new strategy, BP initiated the sale of the majority of its clean-energy and transition-focused venture capital portfolio to growth investor Verdane in July 2026.
BP's decision to pivot away from green energy commitments comes after facing pressure from activist investor Elliott Management, which increased its stake to over 5% last year and called for the company to abandon its green commitments, slash renewable investments, and increase spending on fossil fuels. Despite these challenges, BP expects to see a major reduction in its net debt to between $13.5 billion and $14.5 billion, a decrease from $22.3 billion in the second quarter of the year.
The company also anticipates a boost of $1.9 billion to $2.1 billion in earnings due to stronger refining margins, which arise from the global surge in fuel prices.
Oil prices have surged above the $100 mark throughout September due to the ongoing conflict in Iran. BP expects its upstream production to fall between 2.19 million and 2.24 million barrels of oil equivalent per day, down from approximately 2.2 million barrels in the previous quarter. Furthermore, the G7 nations have agreed to release 100 million barrels of emergency diesel and oil to prevent a supply crisis, working with the International Energy Agency to ramp up releases from their emergency stockpiles in response to market pressures.
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