Beyond Petroleum, or Beyond Profit?
At an investors' meeting in London last Wednesday, BP officials said the company's alternative energy businesses were not making enough money for shareholders (watch the company's Web cast here). Business writers have since speculated that BP is indeed looking for a buyer for its alternative energy units, and renewing its focus on oil. (Read the MarketWatch story hereand the Reuters story here.) To be fair, BP's alternative energy chief told investors the company still plans to launch a new hydro project in Addis Ababa, and to continue investing in some alternative fuels. But the moment was a bit awkward when one analyst asked why the company doesn’t simply divest itself of the units. CEO Tony Hayward carefully fielded that question, saying that the company will simply be looking at ways to coax out the units' value. Alternative energy chief Vivienne Cox then piped up, with some nervous laughter, to note that Hayward hadn’t said whether he meant to sell the businesses. Whatever the company decides, it's not a great sign for alternative energy when a giant like BP leaves the impression that those investments can’t turn a profit.