BP has warned shareholders that it will write down the value of its green investments by between $4 billion and $5bn.
The FTSE 100 energy company said the impairments were linked to its move away from lower-carbon energy. Former CEO Murray Auchincloss pursued a move into green energy which he then reversed.
He abandoned a target to develop 50 gigawatts of renewables — equivalent to the entire renewable capacity of the UK at the time of the pledge — and slash output from its core oil and gas business by 40% by 2030.
Mr Auchincloss will be replaced in April by Meg O’Neill, chief executive of Woodside, Australia’s largest energy company.
In a fourth quarter update BP said: “The fourth-quarter results are expected to include post-tax adjusting items relating to impairments … in the range of $4 to $5 billion, primarily related to our transition businesses.”
The company said the impairments would not affect underlying replacement cost profit, its preferred measure of net profit.
lt also highlighted weak oil trading with the average price of Brent crude declining to $63.73 a barrel in the fourth quarter, from $69.13 in the third quarter.
Dan Coatsworth, head of markets at AJ Bell, said: “Put the write-downs together with a weak showing for its oil trading arm and the impact from weaker oil prices looks like the final set of quarterly results before Meg O’Neill steps into the hotseat in April will be downbeat.
“From O’Neill’s perspective this is no bad thing as it gives her a low base from which to build. However, it does illustrate the scale of the challenge in front of her.
“There’s little O’Neill can do about a capricious oil market but investors, including activist Elliott, will hope the new CEO can transform BP into a more streamlined and efficient business and revive its traditional oil and gas operations.
“O’Neill will be supported by chair Albert Manifold who led a transformation, albeit in a different sector, at construction materials firm CRH.
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