BP Plans to Sell U.S. Onshore Wind Division Amid Strategic Shift

BP plc BP, a leading UK-based energy company, has announced plans to sell its onshore wind business in the United States. This marks a strategic shift as the energy giant refocuses on its solar partnership and other renewable energy sources. The move, which came amid challenges in the wind sector, signals BP's shift from certain renewables despite previous efforts to diversify its energy portfolio.

BP to Exit Onshore Wind

The company revealed its intention to sell BP Wind Energy, which holds interests in 10 onshore wind projects across seven U.S. states, with a combined generating capacity of 1.3 gigawatts (GW). BP cited the misalignment of the business with its future growth strategies as the primary reason behind the sale. William Lin, BP's executive vice president for gas and low-carbon energy, stated that the wind business "is likely to be of greater value for another owner."

The onshore wind sector has encountered significant challenges of late, including high material costs, rising interest rates and supply-chain issues. Several companies in the sector have been compelled to cancel or renegotiate contracts, laying pressure on BP's wind assets.

Focus Shifts to Lightsource BP Solar Partnership

In contrast to its wind energy divestment, BP is increasing its solar efforts. The company recently announced plans to take full ownership of Lightsource BP, Europe's largest solar developer. This move aligns with BP's broader strategy to concentrate on its solar partnership, which it considers to be on par with its current growth objectives.

The wind business sale marks a pivotal moment for BP as it realigns its energy transition strategy, pivoting away from wind energy to enhance its core oil and gas operations and focus on certain renewable sectors.

BP's Zacks Rank & Key Picks

BP currently carries a Zack Rank #5 (Strong Sell).

Investors interested in the energy sector may look at some better-ranked stocks like TechnipFMC plc FTI, Core Laboratories Inc. CLB and VAALCO Energy, Inc. EGY, each carrying a Zacks Rank #2 (Buy) at present.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI's growing backlog ensures strong revenue visibility and supports margin improvements.

The Zacks Consensus Estimate for FTI's 2024 EPS is pegged at $1.34. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.

Core Laboratories, an oilfield services company, has a deep portfolio of sophisticated, proprietary products and services that positions it to take advantage of the growing maturity in the global hydrocarbon reserve base. CLB's expanding international upstream projects indicate a positive trajectory for revenues and profitability, especially as oil demand continues to rise globally.

The Zacks Consensus Estimate for CLB's 2024 EPS is pegged at $0.95. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.

VAALCO Energy is an independent energy company involved in upstream business operations, with a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Canadian Acreage, the company's production outlook seems bright.

The Zacks Consensus Estimate for EGY's 2024 EPS is pegged at $0.65. The company has a Value Score of A. It has witnessed upward earnings estimate revisions for 2024 in the past 30 days.

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