BP has announced plans to sell stakes in two flagship carbon capture and storage (CCS) projects in the north-east of England, marking a continued retreat from the green agenda under its new leadership. The oil giant aims to reduce its share in the Net Zero Teesside (NZT) project, which seeks to develop the UK’s first gas power plant equipped with a carbon capture system to remove emissions. Additionally, BP plans to cut its stake in the Northern Endurance Partnership (NEP), which involves building offshore pipelines to transport carbon dioxide from the Humber and Teesside for storage under the North Sea.
Background of the Projects
The NZT and NEP projects were championed by former BP chief executive Bernard Looney as “the right thing for the world, a tremendous business opportunity” that would create the nation’s first major carbon capture initiative and potentially “the world’s first zero-carbon industrial cluster.” However, Looney’s departure nearly three years ago triggered a tumultuous period for the 117-year-old company, including a leadership overhaul and a gradual dismantling of his green agenda, which failed to gain shareholder approval.
Current Status and Plans
BP stated that the “time is right” to sell a portion of its equity in both projects, which have recently entered the construction phase, to bring in additional partners for long-term support. The company did not specify how much of its stake it intends to sell or whether it is in discussions with potential buyers. Other stakeholders include Norway’s state oil company Equinor, involved in both schemes, and French oil company TotalEnergies, which holds a stake in the NEP pipeline project.
Broader Retreat from the North Sea
BP’s decision to step back from UK carbon capture plans comes amid reports that the company is considering a broader retreat from the North Sea after over 60 years of operations. New CEO Meg O’Neill is reportedly reviewing BP’s global portfolio and may reduce exposure to the UK, partly due to government energy policies. The government has banned new exploration licenses in the North Sea and resisted calls to amend the windfall tax regime to encourage more oil and gas production.
Political and Market Reactions
Energy Secretary Ed Miliband recently criticized BP’s windfall profits on social media as “morally and economically wrong,” though he quickly deleted the comments. O’Neill, who took over in April, has already dismantled the ‘gas and low-carbon’ division established under Looney, signaling a return to BP’s traditional structure of upstream oil and gas production and downstream refining and retail operations.
These developments underscore BP’s shift away from ambitious green initiatives amid shareholder pressure and changing market conditions, raising questions about the future of carbon capture in the UK.
