BP is undertaking a significant restructuring of its asset portfolio under CEO Meg O’Neill, signaling a clear shift in strategic priorities that dismisses sentiment and historical ties. Last week, the company announced it was putting its longstanding North Sea oil and gas operations up for sale, citing their inability to compete effectively for capital. The decision marks a departure from BP's previous focus and highlights the company’s efforts to streamline and focus on more profitable ventures.

In a related move, BP is also seeking to divest its US biogas business, Archaea Energy, which it acquired less than four years ago for $4 billion. The business, initially celebrated by former CEO Bernard Looney as a rapidly growing contributor aligned with BP’s net zero ambitions, has since been downgraded following a substantial write-down. It is now considered too capital-intensive for a company prioritizing debt reduction.

These sales are part of a broader asset disposal program that extends beyond green energy initiatives. BP has already sold a major refinery in Germany and Austrian fuel stations, and the consumer lubricants brand Castrol was put up for sale before O’Neill took the helm. The company anticipates reaching its target of reducing net debt below $18 billion by the end of the year — a milestone expected to be achieved 12 months ahead of schedule. This accelerated fiscal improvement has been supported by a surge in profits driven by elevated oil and gas prices following the conflict involving Iran.

BP’s second-quarter profits more than doubled to $5.73 billion, benefiting from increased oil prices that averaged $94 per barrel, up from $67 in the previous quarter, as well as higher natural gas prices. The company also gained from constrained global oil flows, which boosted refining margins.

Despite strong earnings, O’Neill has yet to signal when BP will resume share buybacks, which were paused earlier in the year due to balance sheet concerns. Investors are expected to press the CEO for clarity on capital return plans in the near future.

In discussions with Greater Manchester Mayor Andy Burnham, O’Neill emphasized the continuing importance of the UK’s North Sea production. She noted that fossil fuels currently supply 75% of the UK’s energy and argued that domestic oil and natural gas production supports jobs, tax revenues, and other economic benefits. O’Neill suggested that prioritizing North Sea output helps reduce reliance on imports, particularly liquefied natural gas, which carries higher emissions, a key consideration as the UK advances its decarbonization goals.

While BP appears committed to exiting its North Sea operations, O’Neill indicated that any effort to increase domestic energy supply will require policy support, including a potential reassessment of the UK’s energy profits levy— a windfall tax imposed in 2022— to encourage further investment in the basin. This issue is expected to be a significant consideration in the upcoming government budget in October.