BP puts $4.1B biogas unit up for sale amid fossil fuel pivot

BP ↘ 0.92% announced Tuesday that it intends to sell Archaea, its U.S. biogas business, as the British oil major continues its pivot back toward fossil fuels. The company acquired Archaea for $4.1 billion in 2022 as a bet on growing demand for renewable fuel.wsj+1

Strong Profits Accompany Strategic Retreat

The divestment announcement came alongside BP's second-quarter 2026 earnings, which showed underlying replacement cost profit of $5.7 billion, a 78% increase from $3.2 billion in the prior-year quarter. BP reported earnings of $1.24 per share, beating the Zacks Consensus Estimate of $0.91 per share.investing+2

Despite these results, BP is shedding its biogas operations as part of a broader strategy to reshape its portfolio around businesses that generate higher returns. The company had already written down the value of Archaea, which turns landfill waste into renewable natural gas.hartenergy+2

A Reversal on Renewables

The sale marks a sharp reversal from BP's earlier climate ambitions. In January, the company flagged $4 billion to $5 billion in fourth-quarter 2025 impairments tied mainly to its low-carbon energy businesses. By February, BP had suspended its share buyback program as it wrote down roughly $4 billion in its renewables and biogas operations ahead of new leadership taking the helm.linkedin+1

The moves reflect a broader industry trend, with BP joining other European oil majors in scaling back renewable energy commitments amid pressure from investors seeking higher short-term returns from traditional fossil fuel operations.

What Comes Next

BP is now looking to attract buyers for Archaea as it reshapes its portfolio under the direction of Chair Albert Manifold. The sale, if completed, would represent one of the most prominent examples of an oil major unwinding a major renewable energy acquisition made during the sector's push toward energy transition earlier this decade.reuters