BP WANTS NEW ENERGY

BP: No plans to sell alternative-energy units
July 14, 2010 (MarketWatch)

"BP PLC…has no plans to sell its renewable-energy businesses as the British oil giant seeks to sell billions of dollars of assets in the wake of the Gulf of Mexico oil spill, [John Graham, president of BP Wind Energy] said…BP has said it plans to sell $10 billion of assets over the next year, and speculation is growing over which assets will go…

"BP's alternative-energy business is dwarfed by the traditional activities of exploring for and producing oil, and refining and selling oil products. The company has committed to invest $8 billion between 2005 and 2015 in alternative energy, whereas BP, in its first-quarter earnings announcement, said it expected total capital expenditures of $20 billion this year alone. The company develops solar-power technology and wind-power projects, and also has hydrogen and biofuel businesses. BP has wind farms in seven states, including California and Texas. The company is also developing projects in California to capture the carbon dioxide emitted by using petroleum coke to produce hydrogen for generating power."

You BET they're keeping the New Energy. But why? (click to enlarge)

"The integrated oil company talked about selling off the renewable-energy business at an analyst meeting two years ago when it had a value of at least $5 billion [but took it off the table]…BP has spent half of the $8 billion it allocated to renewable-energy development in 2005, of which $1.8 billion went to wind projects. The remaining $4 billion will be spent over the next four years, but it's unclear how that money will be allocated…

"Competition has grown among renewable-energy developers as utilities shy away from signing long-term agreements to purchase power from them, due to uncertainty over the future of U.S. clean-energy and climate-change policy. Development plans in 2012 and beyond will depend on whether Congress extends various incentives and electricity demand rises, Graham said. A federal cash-grant program for wind-project developers will expire at the end of this year, and tax credit for producing renewable power will end in 2012…"

click to enlarge

"About two years ago, BP decided to focus its wind-development efforts in the U.S. and sold off three wind farms it had in India. Since the oil spill began on April 22…[t]he company's strong financial position helped it secure highly sought-after wind-power contracts with utilities… BP is reviewing options to build two wind-power projects totaling 400 megawatts, either by expanding existing wind farms or by going to new locations, possibly in California, Colorado, Indiana or Wyoming…

"BP, the ninth or 10th largest wind-power generator in the U.S., is looking at ways to create synergies across its alternative-energy business by offering different options to utilities…By the end of the 2010, wind-power capacity will total 1,500 megawatts, up from 1,200 megawatts. BP has two projects under construction in Idaho and Colorado totaling 375 megawatts…"