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BP plc’s BP current efforts to scale back on its renewable projects' expansion shall not affect the offshore wind projects that the British energy major has undertaken with the German energy company EnBW, as per Reuters. In recent months, BP has been maintaining its focus on its high-margin business while scaling down the aggressive expansion of its renewables unit. The company had previously announced that it plans to sell off its U.S. onshore wind business and divest a small stake in its offshore wind business.
Overview of the Partnership
However, per EnBW, these decisions are not likely to affect BP’s partnership with the German energy firm. BP and EnBW forged a 50-50 partnership in 2021 to develop offshore wind projects in the UK. The companies have signed lease agreements for two 60-year leases that should enable them to develop offshore wind projects in the Irish Sea. Furthermore, they have signed an option agreement related to a lease in the UK North Sea.
The three projects, named Morven, Morgan and Mona, have the collective capacity to generate up to 5.9 gigawatts (GW) of power, enough to meet the needs of approximately 6 million households in the UK.
BP’s Scale-Back Unlikely to Affect JV’s Operations
EnBW mentioned that BP’s strategy to scale down its renewables business is global. The decision does not affect the JV’s plans. EnBW further mentioned that the JV is advancing with its projects, and the operations remain unaffected by BP’s decision to cut back on further investments in renewables.
BP’s Zacks Rank and Key Picks
Currently, BP carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Archrock Inc. AROC, Smart Sand, Inc. SND and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy) each, while Smart Sand and FuelCell Energy carries a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
Smart Sand, Inc. is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained demand in the oil and gas market, SND is expected to see growing demand for its services, reflecting a positive outlook.