BP plans to sell stakes in two flagship carbon capture and storage projects in the north-east of England as the company continues to retreat from the green agenda.
The oil company hopes to reduce its share in the Net Zero Teesside (NZT) project, which aims to develop the UK’s first gas power plant to be fitted with a controversial carbon capture system to remove its emissions.
It also plans to cut its stake in the Northern Endurance Partnership project (NEP), which plans to build a network of offshore pipelines to transport carbon dioxide from the Humber, including the Teesside power plant, and store it under the North Sea.
BP’s flagship carbon capture projects were backed by Bernard Looney, the company’s former chief executive, as “the right thing for the world, a tremendous business opportunity” which would create the nation’s first major carbon capture project and “maybe the world’s first zero-carbon industrial cluster”.
His departure almost three years ago has led to a tumultuous period for the 117-year-old company, including a leadership overhaul and a steady dismantling of Looney’s green agenda, which failed to win over BP shareholders.
BP said the “time is right” to sell a portion of its equity in the two projects, which have recently started construction, and bring in additional partners to support the long-term future of the projects.
The company did not set out how much of its share in each project it hopes to sell, or whether it was in discussion with potential buyers.
Other companies involved in the projects include Norway’s state oil company Equinor, which has a stake in both schemes, and the French oil company TotalEnergies, which has a stake in the NEP pipeline project.
BP’s decision to step back from the UK’s carbon capture plans has emerged amid reports the company is considering a retreat from the North Sea after more than 60 years operating in the oil basin.
BP’s new chief executive, Meg O’Neill, is understood to be reviewing the company’s global portfolio and may consider cutting its exposure to the UK, in part due to the government’s energy policies.
The government has banned new exploration licences in the North Sea and resisted calls to amend the previous government’s windfall tax regime to help encourage more oil and gas production.
Ed Miliband, the energy secretary, used a social media post last week to condemn BP’s recent windfall profits as “morally and economically wrong” before quickly deleting the comments.
O’Neill, who stepped into the role in April, has already set out plans to dismantle the company’s ‘gas and low-carbon’ division, set up under Looney. The move has been viewed as a return to the company’s previous structure of being an upstream oil and gas production business and a downstream unit focused on refining and distributing fuels and retail activities.