BP to sell US onshore wind business to LS Power for undisclosed sum

BP has recently announced the sale of its U.S. onshore wind business to LS Power, a power and energy-focused investment and operating company. This move is part of BP’s ongoing divestment strategy, which aims to streamline its operations and focus on core assets. The deal, which includes 10 operating wind assets with a total generating capacity of 1.7 gigawatts, will significantly bolster LS Power’s Clearlight Energy’s operating fleet to approximately 4,300 megawatts.

The exact value of the transaction has not been disclosed by BP, leading to speculation among analysts about the potential size of the deal. HSBC analyst Kim Fustier noted that the absence of consideration in the press release is unusual and may indicate that the portfolio could be valued lower than typical multiples for onshore wind assets. Fustier also suggested that BP may need to make additional disposals to meet its target of $3 billion to $4 billion in asset sales by the end of the year.

This divestment comes at a time when BP is facing criticism from investors for its underperformance in recent months. The energy major has pledged to divest $20 billion worth of assets by 2027 under CEO Murray Auchincloss’ plans, as part of efforts to cut debt, increase cash flow, and pivot back to oil and gas following a challenging period in renewables.

In addition to the sale of its U.S. onshore wind business, BP recently struck a deal with Apollo Global Management to sell its stake in a firm invested in the TANAP gas pipeline linking Azerbaijan and Turkey for $1 billion. These strategic moves are part of BP’s broader strategy to reshape its portfolio and focus on high-value assets that align with its long-term growth objectives.

Following the announcement of the sale, shares of BP were up 1.9%, reflecting positive investor sentiment. The energy company’s stock performance is also being buoyed by a rise in oil prices and a positive outlook for the energy sector as a whole.

Overall, BP’s decision to sell its U.S. onshore wind business to LS Power underscores its commitment to strategic divestments and portfolio optimization. By streamlining its operations and focusing on core assets, BP aims to enhance its financial performance and create long-term value for shareholders.