Latest news with #fossilfuels
Yahoo
20 hours ago
- Business
- Yahoo
BP sells American wind business to LS Power as it continues its renewable retreat
BP will sell its U.S. onshore wind business to New York-based LS Power, as the Big Oil giant continues to divest from much of its renewable energy assets amid financial challenges. The anticipated sale, announced July 18 for an undisclosed sum, meshes with BP's new strategy of doubling down on fossil fuel production while cutting overall costs, especially in clean energy investments. It includes ownership stakes in 10 U.S. wind farms with a combined gross capacity of 1.7 gigawatts, roughly enough to power 1.3 million homes. 'We have been clear that while low-carbon energy has a role to play in a simpler, more focused BP, we will continue to rationalize and optimize our portfolio to generate value,' said William Lin, BP executive vice president for gas and low-carbon energy, in a statement. 'The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward.' Amid struggling stock performance and increased investor activism, BP announced in February it would divest about $20 billion in assets through 2027, including up to $4 billion in 2025. The company said it would also be investing nearly 20% more per year in oil and gas production. Earlier this month, BP said it would sell its network of 300 fueling stations in the Netherlands—also for an undisclosed price—to the Dutch business Catom. The company plans to sell its retail fueling business in Austria as well, and is also divesting a 50% stake in its Lightsource solar business and selling much of its global offshore wind business through a new, fifty-fifty joint venture with Japanese utility JERA. BP has already sold a $1 billion stake in the TANAP gas pipeline from the Caspian Sea to Apollo Global Management. A strategic review of its Castrol lubricants business is ongoing. Castrol alone is worth close to $8 billion, according to analyst estimates. With BP and archrival Shell both now London based, long-rumored reports escalated in late June that Shell would enter early talks to buy BP in what would be the biggest energy deal this century—if not ever. However, Shell quickly denied any such negotiations, and BP has declined to comment. BP appointed former Shell CFO Simon Henry to its board in July—three months after longtime BP chair Helge Lund said he planned to step down. The renewable energy business in the U.S. is facing additional headwinds from the Trump administration's opposition to wind and solar power, including the recent rapid phasing out of tax credits for clean energy construction through the president's new mega-spending legislation. But BP's loss is LS Power's gain. The New York renewable energy developer touted the addition of the wind farms to its 21-gigawatt portfolio of power on Friday as a major coup for the company. 'LS Power's mission is to solve complex energy problems to improve the world and make lives better by developing a cleaner, more reliable, and affordable energy ecosystem, and today's announcement represents a material investment in reaching that goal,' said LS CEO Paul Segal in a statement. The deal, which is expected to close by the end of 2025, includes wind farms in Colorado, Hawaii, Idaho, Indiana, Kansas, Pennsylvania, and South Dakota. The biggest footprints are in Indiana and Kansas. LS will operate the BP assets under its Clearlight Energy portfolio company. This story was originally featured on
Bloomberg
a day ago
- Business
- Bloomberg
Chevron Celebrates Big Victory in Fight With Exxon
Amid the political inertia (or wholesale retreat) miring efforts to forestall the most catastrophic consequences of global warming, the industry primarily responsible for it saw a historic victory Friday. Following an unprecedented, 20-month fight between Chevron and Exxon-Mobil, Chevron emerged the winner. The prize? Chevron can now buy another fossil fuel company, Hess, for $53 billion. The ruling by an arbitration court ended a period of strategic limbo that hurt Chevron's stock and prompted questions over the quality of the company's due diligence when it agreed to snap up Hess in 2023. Exxon, which operates and owns 45% of Guyana's offshore Stabroek Block, claimed it had a right of first refusal over the disposition of Hess's 30% stake. Acquiring Hess and its interest in Guyana significantly increases the quality of Chevron's oil assets beyond the Permian Basin of Texas and New Mexico, narrowing the gap with Exxon. 'This creates a premier international and oil and gas company,' declared Chevron Chief Executive Officer Mike Wirth. Meanwhile, some hedge funds are really cashing in on the deal.
Forbes
a day ago
- Business
- Forbes
A New Beginning: Exxon, Chevron Now Partners In Guyana
John Hess, chief executive officer of Hess Corp., left, and Mike Wirth, chairman and chief executive ... More officer of Chevron Corp., during a Bloomberg Television interview in New York, US, on Monday, Oct. 23, 2023. Chevron Corp. agreed to buy Hess Corp. for $53 billion, a deal aimed at boosting production growth as the US oil industry bets on an enduring future for fossil fuels. Photographer: Jeenah Moon/Bloomberg ExxonMobil will now have a new, very familiar partner in its massive project in the deepwaters off the coast of tiny South American nation Guyana after Chevron emerged the winner in a 16-month-long arbitration case on Friday. Chevron, like ExxonMobil one of the legendary 'seven sisters' companies created following the 1911 breakup of the Standard Oil monopoly, announced a $53 billion takeover of U.S. independent producer Hess Corp. in October 2023. Chevron was initially confident the deal would have little trouble gaining necessary approvals from the SEC and other regulators, but ExxonMobil had other ideas. Exxon, a 45 percent owner and operator of the three-company consortium which has developed the prolific Stabroek Block and other areas offshore Guyana over the last decade, filed a challenge to the arrangement in March 2024. While Hess has other significant assets, including a major position in the Bakken Shale of North Dakota, its 30% stake in the Guyana development is widely considered the key prize for Chevron in the acquisition. 'This merger of two great American companies brings together the best in the industry,' said Chevron Chairman and CEO Mike Wirth said in a statement. 'The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders.' Exxon Mobil Chairman & CEO Darren Woods speaks during the CERAWeek oil summit in Houston, Texas, on ... More March 18, 2024. (Photo by Mark Felix / AFP) (Photo by MARK FELIX/AFP via Getty Images) In a press release, an ExxonMobil spokesperson said, 'We disagree with the ICC panel's interpretation but respect the arbitration and dispute resolution process. As we've said before, ExxonMobil and CNOOC (the third partner in the consortium) are aligned that we had a duty to ensure contract terms are always adhered to and not set a bad precedent for ourselves and industry. Given the significant value we've created in the development of the Guyana resource, we believed we had a clear duty to our investors to consider our preemption rights to protect the value we created through our innovation and hard work at a time when no one knew just how successful this venture would become. We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved.' The consortium's operations are governed by a joint operating agreement (JOA) which contains language allowing existing partners to pre-empt sales of interests like Hess's to third parties by exercising a right to match the offer. In addition to the partners, ExxonMobil expressed concern at the time that the rights and desires of the Guyanese government, a major beneficiary from royalties and fees related to the project, were also protected. Shortly after the challenge was filed, ExxonMobil senior vice-president Neil Chapman told a conference that, 'We understand the intent of this language of the whole contract because we wrote it,' adding, 'The Chevron-Hess transaction, what it really did, is it attempted to circumvent the commercial purpose' of the agreement. But ultimately, arbitrators at the International Chamber of Commerce ruled for Chevron. ExxonMobil initiated exploratory efforts at the Stabroek Block in 2008 and made its initial discovery with the successful completion of the Liza-1 well in 2015. The Liza-1 was drilled in a depth of more than 5,700 feet of water with a total depth of 17,825 feet. Since that time, the Consortium partners have announced a long series of new discoveries, raising total current production levels to over 650,000 barrels of oil per day (bopd). In its 2024 Annual Report, ExxonMobil says it expects to double production levels to more than 1.3 million bopd by the end of 2027, and that payments to the government of Guyana, a tiny nation with around 800,000 inhabitants, will total more than $10 billion per year by the end of the decade. Chevron says the closure of this huge takeover will be accretive to its bottom line and 'is expected to drive significant free cash flow and production growth into the 2030s,' which is likely an understatement. Guyana has for a decade ranked at the top of major international oil developments and is likely to remain so for years to come. So long, that is, as these two former 'sisters' and their Chinese partner are able to settle into a cooperative and productive relationship.
Irish Times
a day ago
- Business
- Irish Times
Government approves Renewable Heat Obligation Bill to curtail reliance on fossil fuels
Suppliers of fossil fuels used for heat, notably in industry, will soon be obliged to demonstrate a proportion of energy they supply is from a renewable source, following Government approval of a renewable heat obligation (RHO) scheme . Legislation is due to come into force next year and apply until 2045. The RHO is designed to increase Ireland's renewable share in heating and cooling under the EU renewable energy directive. 'This will support emissions reductions in our heat sector and contribute significantly towards meeting our national climate and energy targets,' said Minister for Climate and Energy Darragh O'Brien on Friday. 'As Ireland imports most of its fossil fuels, the heating sector is a significant contributor to Ireland's high energy import dependency. The RHO will help to reduce our reliance on imported fossil fuels and strengthen our energy security,' he added – the heat sector including residential homes generates more emissions than the electricity sector. READ MORE In a move to support an indigenous sector for biomethane, it will be the key renewable under the scheme – and be generated from agricultural and food wastes as well as biocrops. 'Biomethane will provide a significant contribution as we look to diversify Ireland's gas supply,' Mr O'Brien said. [ Cabinet approves scenarios for firms to build private electricity lines in Ireland Opens in new window ] Production activity will largely occur in rural areas, with the potential to develop a sector of significant scale to benefit the rural economy in Ireland, he added. The Bill requires support for indigenously produced biomethane, 'encouraging obligated parties to procure supplies from domestic producers'. The Department of Climate, Energy and the Environment will engage with the EU Commission to ensure compliance with EU Single Market rules. David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 In drafting the legislation, the Minister has set out necessary functions and provisions of the recently appointed scheme administrator – the National Oil Reserves Agency. The Bill provides detail on opening obligation rates of 1.5 per cent in year one, and 3 per cent in year two. While no final target level has been set, obligation rates are expected to increase ambitiously following a full scheme performance and market review in year three. Mr O'Brien said stakeholder input had helped ensure 'we provide the required level of support to our newly emerging renewable fuel markets and appropriately manage the resulting impact on end-consumers'. Ireland's renewable heat penetration at 7.9 per cent is the lowest in the EU, lagging behind the EU average of 25 per cent and comparing unfavourably with member states such as Denmark with more than 50 per cent. Residential heat demand in Ireland remains highly dependent on fossil fuels. In 2023, 90 per cent of residential heat came from fossil fuels, exposing Irish households to the twin risks of security of supply and cost inflation while also contributing to greenhouse gas emissions. Transitioning Irish homes and businesses from natural gas and oil to renewable energy sources, particularly domestically produced fuels, is being pursued by the Government to address issues across security of supply; affordability and renewables penetration.
Irish Times
a day ago
- Business
- Irish Times
BP offloads US onshore wind business as it pivots back to oil
BP has struck a deal to offload its US onshore wind business to LS Power, as the FTSE 100 energy major pushes ahead with its pivot back towards fossil fuels in a bid to revive its share price. The wind farms, spread across seven states, are all operational and have a combined capacity of 1.7GW, of which BP owns 1.3GW. The sale is the latest move in a $20 billion (€17 billion) divestment programme, announced by BP in February, to streamline its business and boost returns to shareholders after a period of lacklustre performance. READ MORE The terms of the deal, announced on Friday, were not disclosed. In April, BP said it had signed or completed $1.5 billion of divestments already in 2025 and expected to raise a total of $3 billion to $4 billion from asset sales over the course of the year. Some previous estimates have valued the BP's US onshore wind business at as much as $2 billion. However, pricing for recent transactions involving US wind farms of a similar age suggests the value is likely to be lower. BP said the deal followed a 'competitive' 10-month auction process. [ Shell denies takeover talk, but BP's woes persist Opens in new window ] After completion of the transaction, which is expected before the end of the year, BP Wind Energy will form part of LS Power's subsidiary Clearlight Energy, increasing the North American energy group's operating fleet to about 4.3GW. The move comes as BP seeks refocus on its core oil and gas operation. William Lin, the company's executive vice-president for gas and low-carbon energy, said on Friday that green energy still 'has a role to play' in its portfolio, adding: 'The onshore US wind business has great assets and fantastic people, but we have concluded we are no longer the best owners to take it forward.' David McWilliams on how 'big incentives' to build could save Dublin city Listen | 36:51 The UK oil major put the wind energy business up for sale last September. At the time, Lin said the onshore wind business was 'not aligned' with BP's plans for growth in Lightsource bp, its solar energy business. BP is also exploring a sale of its lubricants arm Castrol, which has drawn interest from private equity and industry bidders and could be valued at $8bn, though some parties are considering making lower bids, the Financial Times reported in June. Over the past 12 months, BP's share price has fallen more than 10 per cent, sparking speculation that it could be ripe for a takeover. Activist investor Elliott Management has built a stake and been pressuring the board to shake up the business. Last month, rival Shell was forced to deny rumours that it was planning a bid for BP, saying it had 'no intention' of making an offer for the company. This month, BP warned that lower oil and gas prices were likely to hit second-quarter earnings, despite it increasing production. The company said it expected earnings in its oil business to be $600mn-$800mn lower in the three months to the end of June than the previous quarter, while gas would be between $100mn and $300mn lower. BP's shares rose 1.9 per cent in morning trading. – Copyright The Financial Times Limited 2025
