The specific failures of hydrogen and solar initiatives are the primary drivers behind BP’s newly announced $5 billion writedown. The company revealed that the impairments are concentrated in its transition businesses, following decisions to cancel hydrogen projects in the UK, Oman, and Australia, and to sell a stake in its solar arm, Lightsource.
These specific cuts illustrate the practical reality of the company’s strategic pivot. By stepping back from these capital-intensive and slow-to-mature technologies, the firm is freeing up resources to reinvest in its core fossil fuel operations. This moves the company away from the “integrated energy” model pursued by former leadership.
The financial update also contained warnings about the core business. Oil trading was weak in the fourth quarter, and the price of crude fell by nearly 20% over the course of 2025. These factors create a challenging backdrop for the company’s strategic realignment.
Despite the gloom surrounding the green cuts, the company reported success in lowering its debt. Reducing net debt to between $22 billion and $23 billion improves the company’s credit metrics and provides stability.
As Meg O’Neill prepares to take charge in April, the message is clear: the experimental phase is over. The company is cutting its losses on hydrogen and solar to focus on the immediate profitability of oil and gas, a strategy that will be tested by the volatile energy market.
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