BP’s new CEO has not shied away from spending on renewables as some had feared.
The company said Thursday it has struck a £254 million deal ($321 million) to take full control of renewables subsidiary Lightsource BP by buying up the remaining 50.3% stake in the company, which is now Europe’s biggest solar developer.
The British oil major’s deal will see it acquire all remaining shares in Lightsource from the company’s founders, management and staff, after BP first acquired a 43% stake in the U.K. renewables startup for $200 million in 2017 before upping its stake two years later.
Founded by current CEO Nick Boyle in Truro, Cornwall, Lightsource quickly grew to become a major player in the solar industry, following a period of fast-paced expansion that has seen it develop 8.4 GW (gigawatts) of solar capacity across 19 countries since first being set up in 2010.
Shares in BP
BP,
+2.32%
increased 3% on Thursday having lost 2% of their value over the previous 12 months.
The acquisition marks BP’s first major deal since former CEO Bernard Looney’s sudden exit from his position in September, after he admitted he had failed to disclose relationships with colleagues.
CFO Murray Auchinloss took over as BP’s interim boss amid the search for a more permanent CEO.
The shakeup led to speculation the new firm’s leadership might seek to reverse Looney’s push to transform BP into a clean energy powerhouse, as surging oil and gas prices have seen the attractiveness of renewable energy investments fall.
The green push saw BP in August 2020 vow to slash its oil and gas production by 40% by 2030, after Looney took up his position in February 2020. The FTSE-100
UK:UKX
oil giant later dropped this target in February 2023, saying it now plans to reduce fossil fuel production by just 25% by 2030.
BP said it will “continue to target double digit equity returns” from Lightsource, with a view to also using the firm’s capabilities to meet its own demand for low-carbon power as it seeks to cut its operational emissions by 50% by 2030.
The oil major said it also plans to use Lightsource’s capabilities to “underpin and de-risk” its hydrogen, EV charging, power-trading and biofuels ventures, in line with plans to transition into an entirely net zero company by 2050.
“This is a natural evolution of the partnership we have built over the past six years – now we will be able to take Lightsource bp to the next level of profitable growth and performance,” said Anja-Isabel Dotzenrath, BP executive vice president for gas and low-carbon energy.
“We will continue to scale this successful business, and also apply its capabilities and expertise to help meet BP’s growing demand for low carbon power from our transition growth engines,” Dotzenrath said.
