Tom Bergin, Reuters 27 Feb 08;
LONDON (Reuters) - BP Plc's Chief Executive said the oil giant's shares have received little, if any, uplift from its investments in renewable energy and hinted the company may sell some of its wind, solar and biofuels operations.
In his first strategy presentation as CEO, Tony Hayward said BP's strong asset base of hydrocarbons could support production of 4 million barrels per day to 2020, and that he was making good progress in turning around BP's troubled refinery division.
However, Europe's second-largest fully publicly traded oil company by market value said it was taking a new approach to its Alternative Energy unit, which was much prized by Hayward's predecessor, John Browne.
While Browne saw renewable energy as core to BP's operations -- highlighted in the "Beyond Petroleum" branding BP spent tens of millions of dollars advertising -- the oil giant now sees its alternative energy unit as simply a portfolio of investments.
A spokesman said the unit or its constituents could be floated or sold in parts. Nothing is on the cards currently, but this may change in the coming year.
"Taking stock market valuations for similar companies, we estimate it is already worth between $5 billion and $7 billion," Hayward said.
"What we will be doing over the course of the year will be looking at ways of realizing that value for shareholders because none of us believe that there is very much of that, if anything, in our share price today," he added.
The spokesman denied the shift represented a lessening in BP's commitment to renewable energy.
Environmental campaigners always dismissed the "Beyond Petroleum" campaign and said BP's much advertised investments in green energy, which represented about 1 percent of the company's total capital expenditure in recent years, was simply a token.
The London-based company was formerly known as British Petroleum.
Tony Hayward said that since his appointment, he had reviewed the business in detail to identify and remedy flaws which in recent years led to delays on big projects, pipeline leaks in Alaska and fatal accidents at U.S. refineries.
He said he was making "significant progress" in restructuring the underperforming oil giant, and that his plan should add billions of dollars in profits.
"We have made significant progress at BP over the past 10 months, quietly and without fuss," Hayward said.
In its refining division, BP said its underperformance compared to rivals meant it was earning $3.5 billion-$4 billion less per year than it should.
The company aims to reduce this by nearly half by end-2009 with most of the remainder of the shortfall slated to be made up in 2010-2011.
BP's shares closed 0.88 percent lower at 561-1/2 pence, underperforming a 0.49 percent drop in the DJ Stoxx European oil and gas sector index.
(Editing by Rory Channing/Elaine Hardcastle)
BP says shares don't benefit from green energy ops
Reuters 27 Feb 08;
LONDON (Reuters) - BP Plc's shares have not received an uplift from its investments in renewable and alternative energy such as wind, solar and motor fuels made from crops, the company's chief executive said on Wednesday.
Tony Hayward told a webcast for investors that the Alternative Energy unit was worth between $5 billion and $7 billion.
"What we will be doing over the course of the year will be looking at ways of realizing that value for shareholders because none of us believe that there is very much of that, if anything, in our share price today," Hayward said.
Bob Dudley, the head of BP's Russian unit added the company remained committed to its operations around Sakhalin Island off Russia's east coast, despite some early exploration disappointments.
(Reporting by Tom Bergin; Editing by Erica Billingham)
