BP is bracing for a hit of up to $4.5bn after a hefty write-down in its energy transition unit, as the firm pivots away from aggressive green targets.
The FTSE 100 energy giant told markets on Tuesday its third quarter update – set for the end of the month – would include a post-tax impairment charge in the range of $3bn to $4.5bn.
“These charges are primarily attributable to transition businesses in the gas & low carbon energy segment,” BP said.
It follows a massive scale back on green ambitions from the oil and gas major, which slashed its planned transition capital expenditure by more than $5bn annually earlier this year to a target of up to $2bn.
In the final quarter of 2025, it forecast write-downs of between $4bn and $5bn (£3.7bn) after the group began to rethink its strategy for transition assets and partnerships in the gas and low-carbon sector.
BP has began selling off and restructuring parts of its transition unit, including the sale of the majority of its clean-energy and transition-focused venture capital porfolio to growth investor Verdane in July 2026.
It also follows growing pressure from activist investor Elliott Management, which upped its stake to more than five per cent last year, to abandon its green commitments, slash renewable investments and ramp up fossil fuel spending.
BP in line for bumper quarter
Elsewhere, BP forecast a major reduction in its net debt to $13.5bn to $14.5bn, down from $22.3bn in the second quarter of the year.
Stronger refining margins – the difference between the cost of crude oil and the market value of finished fuels like diesel and gasoline – are also expected to deliver a $1.9 billion to $2.1 billion earnings boost compared to the previous quarter.
The margins boost follows a similar move from peer Shell, which is poised to reap major gains from the global surge in fuel prices.
Oil prices surged above the $100 mark through September due to the ongoing conflict in Iran.
BP expects its upstream production to fall between 2.19m to 2.24m barrels of oil equivalent per day, compared to around 2.2m barrels in the previous quarter.
Last week the leaders of G7 nations agreed to release a 100m barrels of emergency diesel and oil in a bid to stave off a supply crisis. The group of advanced economies said they would work with the International Energy Agency to ramp up releases from their emergency stockpiles “in light of ongoing market pressures”.
The top brass at BP have undergone a major reshuffle over the last year following a boardroom bust-up that led to the ousting of former chair Albert Manifold in May.
Manifold’s exit was reported to have been due to his “volcanic” temper towards colleagues, which stretched to verbal abuse and bullying. Manifold has disputed the characterisation of his conduct.
It came months after former boss Murray Auchincloss departed his role as chief executive after just under two years. He was replaced by former Woodside chief executive Meg O’Neill, who formally stepped into the role in April.