BP has said it expects to write down the value of its struggling green energy business by as much as $5bn (£3.7bn), as it refocuses on fossil fuels under its new chair, Albert Manifold.
The oil company said the writedowns were mostly related to its gas and low-carbon energy divisions in its “transition businesses”, but added that wiping between $4bn and $5bn off their value would not affect its underlying profits when it reports its full-year results in February.
The company has been trying to sell a stake in its solar business, Lightsource, and cancelled hydrogen projects in the UK, Oman and Australia.
BP’s shares fell by as much as 1.4% on Wednesday morning, before recouping some of their losses, as the company also said oil trading had been weaker during its final quarter of the year.
It comes only days after its FTSE 100 rival Shell warned of a weaker performance from trading, amid a drop in the oil price.
BP said the average price of Brent crude was $63.73 a barrel in the fourth quarter of last year, compared with $69.13 a barrel in the prior quarter.
Oil prices last year recorded their steepest annual fall since the Covid pandemic, slumping by almost 20% in 2025, while further declines are expected as producers continue to pump more crude than is required by the global economy.
In recent weeks, prices have come under further pressure after Donald Trump’s capture of Venezuela’s then leader, Nicolás Maduro, and his claim that US oil companies stand poised to rebuild the South American country’s oil industry, adding to fears of a glut.
However, oil prices rose on Wednesday on fears of Iranian supply disruptions because of a potential US attack and possible retaliation. Brent futures rose 1.4% to $66.39.
In an update before its full-year results, BP said it continued to slash its debts, reducing net debt to between $22bn and $23bn at the end of the quarter, compared with $26bn at the end of the previous three months.
The writedown comes after the oil company’s surprise announcement last month that it had appointed Meg O’Neill as its third chief executive in five years. The first female head of a leading oil company, O’Neill will join BP in April from the Australian oil and gas company Woodside.
O’Neill replaces Murray Auchincloss, who ran the company for less than two years, as BP hopes to revive its fortunes. Under Auchincloss, the group pushed further away from the green ambitions of his predecessor Bernard Looney – who was dismissed in 2023 – in favour of ramping up fossil fuel production.
“Put the writedowns together with a weak showing for its oil trading arm and the impact from weaker oil prices, [it] looks like the final set of quarterly results before Meg O’Neill steps into the hot seat in April will be downbeat,” said Dan Coatsworth, the head of markets at the broker AJ Bell.
“From O’Neill’s perspective this is no bad thing as it gives her a low base from which to build. However, it does illustrate the scale of the challenge in front of her.”
BP’s trading update came as Shell and Exxon Mobil announced they had pulled the plug on a planned sale of natural gas assets in the North Sea to the British oil producer Viaro Energy.
Shell said in a statement that commercial and market conditions had changed since the deal was struck in July 2024, while it added that conditions needed to complete the sale were not met.
Shell will continue to operate the assets, which include 11 gas fields and one exploration prospect in the southern North Sea, as well as an onshore terminal at Bacton on the Norfolk coast.