BP Invests in Alternative Energy – Analyst Blog

BP plc (BP) is increasingly moving forward to alternative energy space. The company is planning to invest more than $1 billion this year in alternative energy projects. BP had spent approximately $1.3 billion last year for various alternative programs. Since 2005, the company has invested more than $4 billion in alternative energy, in line with its commitment to invest $8 billion by 2015.

 

The company is mainly involved in four types of alternative energy businesses − wind power, solar power, carbon capture and storage (CCS) and biofuels.

 

In wind power, BP has concentrated its activity in the U.S. It has completed phase I of the 100MW Flat Ridge Wind Farm in Barber County, Kansas, last year. In solar power, the company had faced a lot of challenges in 2009 due to weak demand and poor pricing.

 

BP has been actively involved in the CCS industry for a long time and currently engages in projects in Abu Dhabi and California. The company continues to invest significantly in biofuels. In 2009, it declared a $45 million investment plan for a bioethanol project in Florida.

 

While BP has a strong outlook in the alternative energy space, we like the company’s initiatives to focus on improving upstream exposures and reducing downstream operations. The company plans to strategically invest in E&P to enhance its operating, capital and cost efficiencies.

 

Continued strong operational performance and a solid project pipeline will provide strength to overall upstream operations, in our view. In addition, BP has been successfully accessing substantial new resource opportunities, including a major new entry into Iraq with the giant Rumaila field.