To assist the British oil giant reach net zero carbon emissions by 2050, BP has agreed to purchase US renewable gas firm Archaea for $4.1 billion, the two parties announced on Monday.
Following recent spikes in oil prices, which have prompted proposals for the cash-strapped UK government to dramatically increase a windfall tax on British energy titans, the London-listed energy behemoth is loaded with cash.
In a statement released on Monday, Chief Executive Bernard Looney stated that the purchase of Archaea would establish “a real leader in the biogas sector, and assist our net zero aim.”
Archaea, a Houston-based company, produces enough renewable natural gas each day to equal nearly 6,000 barrels of oil.
BP will make a payment of $3.3 billion in cash and approximately $800 million in debt, but regulatory and shareholder clearances must still be obtained before the deal can be completed.
To combat climate change, the UK energy giant is striving to shift its focus toward cleaner fuels.
A 40.5 percent investment in an Australian energy project described as one of the largest renewable power plants in the world was announced by BP in June.
But, especially from environmentalists, energy giants frequently come under corporate greenwashing accusations.
Given that Britain’s new finance minister, Jeremy Hunt, reversed course on tax cuts to reduce state debt, Greenpeace UK policy director Doug Parr asked on Monday, “Why not contemplate a full and proper windfall tax on oil and gas?”
“One more won’t hurt and it’s the right one,” he continued. “This government has already made more U-turns than a battalion on parade.”
A windfall tax on the profits of British energy companies was announced earlier this year by the government of former UK Prime Minister Boris Johnson, but it was criticized for being far too low.
Even BP’s archrival Shell’s departing CEO recently said that governments should “probably” tax energy companies more to help shield the poorest from skyrocketing energy costs.
Ben van Beurden said at an energy conference earlier this month that government action was necessary “in any way that results in protecting the weakest.”
And since people in this room are likely to be taxed to pay for it, we should just accept that as a fact of life.
Prime Minister Liz Truss, a former employee of Shell, has thus far resisted extending the windfall tax.
Prices for oil, gas, and power have all increased this year as a result of major economies emerging from epidemic lockdowns and after Russia, a key energy producer invaded Ukraine.
