BP has moved a step further in its strategic aim of diversifying into bioenergy by completing its acquisition of a prominent producer of renewable natural gas (RNG) called Archaea Energy, after securing regulatory and shareholder approval for the deal.
RNG can be used as a drop-in replacement for traditional natural gas, but it has lower lifecycle emissions of greenhouse gases due to being produced from decomposing organic waste.
When it announced it had reached an agreement to purchase Archaea in October 2022, BP said the purchase would bring distinct value by building on its own biogas business and allowing it to expand into the fast-growing biogas market in the United States, as well as delivering further value by integrating it with BP’s global network of customer relations and trading capability.
BP America’s president and chairman, Dave Lawler, said about the acquisition:
“We see enormous opportunity to grow our bioenergy business by bringing Archaea fully into bp. The talent, expertise and passion of their team has let them achieve incredible growth so far, and we’re excited to support the next chapter in line with our strategy.”
BP, which also makes the Castrol metalworking and lubricant products, has strategically targeted five growth engines, including biogas, to enable its transition to becoming a net-zero business by 2050. By 2025, the company expects over 40% of its capital expenditure each year to be investment in these growth engines, with this rising to near 50% by the end of the decade.