BP Seeks Buyers for U.S. Natural Gas Pipeline Stake to Reduce Debt
BP is reportedly seeking buyers for a stake in its U.S. natural gas pipeline network, with the potential sale aimed at raising up to $3 billion, according to sources familiar with the matter. The move is part of CEO Murray Auchincloss’s strategy to reduce the company’s rising debt levels and address investor concerns about performance and profitability.
The British energy giant may sell up to a 49% stake in the pipeline network, sources said, though BP declined to comment on the reports. The sale aligns with a broader effort to streamline assets, including plans to divest stakes in its Lightsource BP solar business, U.S. onshore wind division, and offshore wind operations.
BP’s net debt rose to $24.3 billion as of September 2023, compared to $22.3 billion a year earlier, due in part to lower-than-expected asset sales. Auchincloss is expected to present an updated strategy in February to address the company’s financial challenges and navigate the energy transition.
The U.S. oil and gas pipeline sector has seen increasing consolidation, with existing infrastructure gaining value due to production growth and permitting difficulties for new pipelines. BP’s pipeline network spans approximately 1,500 miles, transporting 1.1 million barrels of crude, natural gas, and fuels daily across the United States.
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BP’s shares have underperformed compared to industry rivals, dropping over 18% this year. By contrast, Shell’s shares have fallen 3%, while ExxonMobil and Chevron have seen gains of 14% and nearly 7%, respectively. Investor pressure is mounting on BP to enhance profitability and provide clearer direction on its energy transition strategy.
The potential pipeline stake sale reflects BP’s focus on raising cash and streamlining its portfolio to balance its energy transition goals with financial stability.
