BP to sell biogas unit Archaea as CEO accelerates turnaround plan

BP Plc announced on August 4, 2026, that it will sell its U.S. biogas business, Archaea Energy, as part of a broader strategy under new CEO Meg O’Neill to streamline operations, reduce debt, and restore investor confidence. The move follows the company’s decision last week to market its U.K. North Sea assets, signaling a sharp pivot away from low-returning ventures and toward core oil and gas operations. O’Neill, who took over as CEO in April 2026, emphasized the need for improvement, stating, “We are not making the most of our potential.” The company reported adjusted second-quarter net income of $5.73 billion, more than double the figure from a year earlier, driven by strong refining and trading profits linked to Middle East market disruptions. BP now expects to reduce its net debt to a range of $14 billion to $18 billion by the end of 2026, ahead of its original 2027 target, positioning it to potentially resume share buybacks suspended earlier this year. “It’s all about getting fit to grow,” O’Neill told Bloomberg TV. “We still have quite a bit of work to do.” Chief Financial Officer Kate Thomson declined to specify when buybacks might restart, instead highlighting a 4% dividend increase announced the same day. BP has already received initial approaches for its North Sea assets, just days into the sales process. Analysts remain cautious, with RBC’s Biraj Borkhataria noting that BP will need to “walk the talk” consistently to rebuild investor confidence. The company’s shares rose as much as 2% in London, outperforming peers Shell Plc and TotalEnergies SE, though its year-to-date gain of nearly 30% trails TotalEnergies. O’Neill, the first external CEO hire in BP’s 100-plus-year history and its first female CEO of a major oil supermajor, has overhauled senior leadership, including the retirement of deputy CEO Carol Howle. She has also simplified BP’s structure into traditional upstream and downstream divisions. The company reduced its expectations for divestment proceeds this year but continues to reshape its portfolio around higher-return businesses. BP acquired Archaea for approximately $4.1 billion in 2022 during its push into low-carbon ventures, a strategy it is now reversing. Thomson declined to comment on whether the sale could recoup the purchase price, calling it too early to say. Operational performance remains a work in progress, with BP lowering its full-year production outlook to 2.18 million to 2.27 million barrels of oil equivalent per day, below analyst expectations, due to Middle East disruptions and portfolio changes. “Operationally, our plants didn’t run as well as they did last quarter,” O’Neill admitted.