BP makes sustainable progress with largest acquisition in years

BP will buy US-based biogas producer Archaea Energy for $4.1 billion, BP said Monday in what would be BP’s largest acquisition in years.

The move is also the largest renewable natural gas (RNG) acquisition ever, even on top of Chevron’s $3.15 billion purchase of Renewable Energy Group, Reuters said Monday, and is in line with BP’s plans to shift focus from oil and gas to reduce greenhouse gas emissions .

Archaea operates 50 RNG and landfill gas-to-energy sites in the United States, although BP plans to increase its RNG production capacity fivefold by the end of the decade.

Archaea reported revenue of $77 million in the second quarter of this year, up $57 million in the first quarter from producing and selling 159,000 MWh of electricity in the quarter. The full 2022 guideline for sold production is between 850,000 and 950,000 MWh.

BP announced in August that it was selling its oil assets in Mexico to focus more on its renewable energy segment, although the political environment in Mexico likely played a role in the asset divestment. BP has one of the most ambitious renewable energy programs among the major oil companies, first announced in 2020 when Bernard Looney took over the reins from Bob Dudley as chief executive.

The company plans to have 20 GW of renewable energy generation capacity by 2025, rising to 50 GW by 2030. As part of its transition to a low-carbon business, BP is also investing heavily in natural gas and hydrogen, along with capture and storage.

BP’s financial strength does not appear to be waning as a result of its increased focus on renewables, with a 10% quarterly dividend hike in Q2 and share buyback announced after its highest quarterly profit in 14 years in Q2 quarter of 2022. net profit was $8.45 billion.

By Julianne Geiger for Oilprice.com

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