BP dumps 18 early stage hydrogen projects as it retreats to oil and gas
BP is selling its US onshore wind portfolio and has dumped 18 early stage hydrogen projects, as the company returns to its safe space of oil and gas.
The news, revealed in the company’s third quarter announcement, will save the company $US200 million ($A303 million).
BP’s new goal is to develop five to 10 hydrogen projects, leaving it with a pipeline of 1.8 mtpa of developments.
The oil company has stopped or paused 24 projects, but hydrogen has been the biggest victim of the shake up.It is also pausing two biorefinery projects, one in Germany and one in the US.
Hydrogen has been the victim of a surge in optimism in 2020/21, in which companies raised huge amounts of money. Today, those same companies are struggling to justify the premium put on hydrogen.
BP is selling assets, such as the wind portfolio, that can’t deliver the kinds of returns the company is still seeing from its gas fields.
The biggest hit to the company's bottom line (at $1bn lost this quarter) has been oil, thanks to rising exploration costs, lower production upstream, and lower pricing for downstream products.
In Australia, the oil company has delayed the start date for electricity generation at its massive $55 billion Australian Renewable Energy Hub (AREH) near the Pilbara to 2029.
It's not all bad news - BP has been rolling out EV chargers at its network of petrol stations and says it’s sold about 1 TWh in the year to date. The company expects growth in energy sold to double compared to 2023.
But the oil company’s shift back towards fossil fuels was clear, even after it dropped a previous goal to cut oil production by 40% from 2019 levels come 2030.