BP will purchase US-based biogas producer Archaea Energy for $4.1 billion, BP said on Monday in what would be BP’s largest acquisition in years.
The move is also the largest renewable natural gas (RNG) acquisition ever, even topping Chevron’s $3.15 billion purchase of Renewable Energy Group, Reuters said on Monday and is in line with BP’s plans to shift focus away from oil and gas to cut greenhouse gas emissions.
Archaea operates 50 RNG and landfill gas-to-energy sites in the United States, although BP has plans to expand its RNG production capacity fivefold by the end of the decade.
Archaea reported revenue of $77 million in Q2 this year, up from $57 million in Q1, producing and selling 159,000 MWh of electricity in the quarter. Full 2022 guidance for production sold is between 850,000 and 950,000 MWh.
BP announced in August that it was selling its oil assets in Mexico to focus more on its renewables segment, although the political environment in Mexico likely played a role in the asset shedding. BP has one of the most ambitious renewable energy programs among Big Oil majors, first announced in 2020 when Bernard Looney took the reins from Bob Dudley as chief executive.
The company plans to have 20 GW of renewable energy generation capacity by 2025, rising to 50 GW by 2030. As part of its transition to a low-carbon company, BP is also betting big on natural gas and hydrogen, along with carbon capture and storage.
BP’s financial prowess doesn’t seem to be diminishing as a result of its increased focus on renewables, increasing in the second quarter its quarterly dividend by 10% and announcing share buybacks after reaping the highest quarterly earnings in 14 years in Q2 2022. BP’s Q2 net profit came in at $8.45 billion.