BP plans to implement additional budget reductions, guided by the CEO's emphasis on boosting profitability.
BP, the multinational oil and gas company, is undergoing significant changes as part of its broader turnaround plan. Here's a look at recent developments and future plans regarding BP's asset sales and divestments.
Recent Developments
BP's new chairman has initiated a comprehensive review of the company's entire portfolio, aiming to cut costs beyond current targets. This move is part of BP's efforts to enhance operational efficiency and investor returns. The company has made significant progress in divestments, with at least $3 billion in completed or announced asset sales this year. The goal is to achieve $20 billion in asset sales by the end of 2027.
BP has also achieved $1.7 billion in structural cost reductions in the first half of 2025, aiming to meet or exceed a total reduction of $4 billion to $5 billion by 2027.
Future Plans
One of the key assets under consideration is BP's lubricants unit, Castrol. Despite strong interest, the sale faces uncertainty due to valuation issues and potential changes in capital allocation under the new chairman's review.
BP is also divesting its U.S. onshore wind portfolio and reducing stakes in global solar and offshore wind businesses, signaling a shift back to core oil and gas operations. The company is selling its Netherlands integrated mobility business and exploring further divestments in its mobility and convenience businesses in other regions.
Strategic Focus
BP's focus has shifted significantly towards increasing profitability in the oil and gas sector, driven by higher energy prices and global security concerns. The company aims to balance its portfolio by divesting non-core assets and focusing on high-performing operations.
BP has brought five new oil and gas major projects online and sanctioned four more. The company's second quarter profits exceeded expectations, with adjusted net income of $2.4 billion. BP shares increased by 1.4% to 411.55p in early trading, resulting in a 2.5% gain for 2025. The company also plans to buy back an additional $750 million worth of shares by the time of its third-quarter results.
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Lale Akoner, global market analyst at eToro, stated that this quarter shows a regained discipline and strategic clarity at BP. Akoner believes BP can balance near-term performance with long-term potential, and the focus on execution, capital discipline, and shareholder returns is paying off.
Rumors suggest rival Shell could launch an opportunistic takeover bid. If BP maintains this focus, sentiment around the stock and the story could shift significantly, according to Akoner.
[1] This is Money [2] Reuters [3] City A.M. [4] The Guardian [5] The Telegraph
- In the realm of finance, BP's new strategy includes divesting its non-core assets, such as its lubricants unit, Castrol, and its U.S. onshore wind portfolio, to focus on high-performing operations, particularly in the energy industry, as reflected in their recent asset sales of at least $3 billion.
- As part of its broader turnaround plan, BP aims to balance its portfolio and enhance operational efficiency, not just by selling assets, but also by investing more in its core oil and gas operations, such as by bringing new major projects online and sanctioning more, as demonstrated by their second quarter profits exceeding expectations.
