YOU ARE HERE: LAT HomeCollections

BP chief says firm may sell 'green' unit

February 28, 2008|From the Associated Press

LONDON — Oil giant BP's chief executive hinted Wednesday that the company might offload part or all of its "green" business unit, reversing a central part of its previous strategy as he seeks to turn the company around.

Tony Hayward, giving his first annual presentation to analysts since taking over from former CEO John Browne in May, also said BP could be producing about 4.3 million barrels of oil equivalent a day by 2012.

BP intends to expand its alternative energy business "predominantly for its equity value," Hayward said. The green unit, much prized by Browne, is worth $5 billion to $7 billion, based on market valuations for similar companies, Hayward said.

"As we go forward we will be looking at how best we can realize that growing value for our shareholders," he said.

Selling all or part of the business would drop a key plank of Browne's strategy, the re-branding of the former British Petroleum under the Beyond Petroleum slogan.

BP's advertising has focused heavily on the firm's green investments, but environmental campaigners have long said it was little more than a marketing gimmick.

Hayward said the company was making good progress with a restructuring plan aimed at improving BP's dismal operational performance after a turbulent year in which it was fined millions of dollars for environmental crimes and fraud.

BP has begun cost-cutting and restructuring, including shedding 5,000 jobs, as it seeks to close the gap with rivals like Royal Dutch Shell and Exxon Mobil Corp. caused by poor performance in BP's refining and marketing business.

Los Angeles Times Articles