BP Braces for $5 Billion Hit as It Pivots Back to Fossil Fuels

In a significant strategic shift, BP has announced it expects to write down the value of its green energy portfolio by up to $5 billion. This major financial adjustment comes as the energy giant refocuses its efforts on its traditional fossil fuel operations. The company cited struggles within its “transition businesses,” specifically its gas and low-carbon energy divisions, as the primary reason for the impairment charges.
Despite the staggering figures, which range between $4 billion and $5 billion, BP reassured investors that these writedowns would not impact its underlying profits for the full year. The company is set to release its complete financial results in February, where more details on the pivot away from renewables will likely be shared. This move aligns with the direction set by the new chair, Albert Manifold, who is steering the company back toward its core oil and gas competencies.
The impairment news follows a period of aggressive restructuring, during which BP has attempted to offload a stake in its solar subsidiary, Lightsource, and canceled several hydrogen projects across the UK, Oman, and Australia. The market reacted swiftly to the announcement, with shares dipping 1.4% before recovering slightly. Investors are weighing the long-term implications of retreating from green energy against the immediate financial cleanup.
Compounding the company’s challenges is a reported weakness in oil trading during the final quarter of the year. The slump in trading performance mirrors similar warnings from rival Shell, indicating a broader industry trend. Global oil prices have been volatile, recording a near 20% drop in 2025, the steepest annual decline since the pandemic, driven by oversupply concerns.
Looking ahead, the company is preparing for a leadership transition. Meg O’Neill is slated to take over as CEO in April, becoming the first woman to lead a major oil firm. She inherits a company with reduced debt—down to between $22 billion and $23 billion—but one that is grappling with a complex geopolitical landscape, including recent fluctuations in crude prices due to tensions involving the US, Venezuela, and Iran.