On Monday, BP and Archaea Energy agreed to buy the US renewables company for $4 billion.
What does this mean?
In 2020, BP announced an ambitious ambition to achieve net-zero status in under thirty years. While many companies have made similar claims in the past, BP seems to be actually following through on its objectives. The British oil giant recently acquired leading renewable natural gas company Archaea and has been utilizing its windfall profit to support its green projects. And get this: Archaea has yet to make a single cent in profit despite the $4 billion transaction being an unbelievable 52 times the value of its 2021 sales. Putting your money where your mouth is is the ultimate sign of devotion to a cause.
Why should I care?
Large energy companies are at a turning point. A road leads in one direction to a green, renewable utopia where renewable energy rules and fossil fuels have long since vanished. However, a quick glance down the other road reveals a world with a reduced supply of oil and gas, resulting in inflated prices, and ample cash reserves for the producers who stick around. Time will tell whether BP's seeming move to greener pastures is merely a money-wasting mid-life crisis.
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