Oil major BP will move heavily in acquisitions and divestments to deliver new strategy after its announcing its strategy for transition from an international oil company to an international energy company.
According to Will Scargill, Managing Oil and Gas Analyst at GlobalData: “BP has set out ambitious targets for the realignment of its business within five and ten year time frames. An overhaul of this scale will require significant movements in the M&A market, if it is to be delivered in the targeted timeframe.”
He said: “Among its growth plans for low-carbon energy sources, BP’s target for renewable power generation capacity is a big ask. Its most significant renewables interests, at present, come from its 50 per cent stake in Lightsource BP, which targets 10 GW by 2023. To reach 20 GW by 2025 and 50 GW by 2030 will likely require significant acquisitions on top of the expansion of capital spending that BP has set out.
Scargill further said: “In terms of its traditional oil and gas segment, BP will need to offload assets that are not high-grade to hit its targets of improving returns on capital from a reduced asset base. It is following up its previous $15bn divestment target with a target of $25 billion for the period 2020-25. Assets most likely to be put on the market are legacy positions with little growth potential.” –Tradearabia News Service