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By Yamini Kalia and Raechel Thankam Job
July 18 (Reuters) – BP (BP.L) has agreed to sell its U.S. onshore wind business to U.S.-based power grid operator LS Power, as part of its ongoing divestment strategy, the energy major said on Friday, without disclosing a deal value.
BP has come under criticism from investors for its underperformance in recent months, leading to a strategy revamp with promises to cut debt, increase cash flow and a major pivot back to oil and gas after an ill-fated foray into renewables.
The company is targeting $3 billion to $4 billion in disposals by the end of this year. It has pledged to divest $20 billion worth of assets by 2027 under CEO Murray Auchincloss’ plans.
“The absence of consideration in the press release is unusual given the potential size of the transaction,” HSBC analyst Kim Fustier said.
“This may suggest that the portfolio could be worth less than typical multiples for onshore wind assets,” Fustier said, adding that another disposal will likely be needed to reach the disposal target this year.
BP struck a deal with Apollo Global Management (APO.N) in March to sell its stake in a firm invested in the TANAP gas pipeline linking Azerbaijan and Turkey for $1 billion.
bp Wind Energy, the business being sold, will be owned and operated under LS Power’s portfolio company Clearlight Energy, BP said.
The deal comprises 10 operating wind assets with a combined gross generating capacity of 1.7 gigawatts, BP said.
Shares of the London-listed company were up 1.9%, with other energy companies also tracking a rise in oil prices.
Reporting by Raechel Thankam Job in Bengaluru Editing by Rashmi Aich and Frances Kerry
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