BP Doubles Q1 Profit to £2.7 Billion While Divesting 11.5 GW of Offshore Wind

BP Doubles Q1 Profit to £2.7 Billion While Divesting 11.5 GW of Offshore Wind Record wartime earnings accelerate BP's retreat from renewables as data centre demand drives new gas plant construction in Indiana. BP was on track to double its first-quarter profit to GBP 2.7 billion as the Iran conflict pushed energy prices higher, Montel reported, citing analyst estimates. EU energy commissioner Dan Jorgensen described the current crisis as "as serious as the 1973 and 2022 crises combined." European countries need to tackle the surging profits at the region's energy majors, analysts told Montel, calling it the "elephant in the room" of the wartime economy.¹ That profit surge comes alongside a strategic retreat from clean energy that is reshaping BP's portfolio. Reports this week indicated that BP and TotalEnergies were looking to divest 11.5 GW of offshore wind projects due to a deteriorating outlook for the sector. The divestment adds to a broader crisis in European offshore wind. Montel reported that up to 16 GW of German offshore wind capacity faces limbo due to grid connection delays and supply chain issues, risking EUR 45 billion of investment according to industry association BWO.² The pattern across big oil is consistent. Since the start of last year, The Economist reported, the S&P 500 has produced a total return of 48%. American oil and gas companies including Chevron and ExxonMobil have returned just 14%. According to Rystad, the six biggest Western oil majors paid out a record $120 billion to shareholders last year, representing 56% of combined operating cashflow. The money is going to buybacks and dividends, not to the AI-driven power demand that is supposed to define the next decade of energy growth.³ The disconnect between big oil's cash generation and AI power demand is playing out at the local level in ways that expose genuine trade-offs. In Indiana, residents at a planning commission meeting accused utility NIPSCO of being secretive about plans to build a gas plant alongside a data centre. Canary Media reported that citizens confronted the company one after another, questioning the impact on their community. The planning commission deferred its decision and vowed to seek more information.⁵ The Indiana confrontation captures something the macro numbers miss. Data centre operators need firm, dispatchable power. Gas plants deliver it. But the communities that host them bear the local environmental cost while the economic value of the data centre accrues elsewhere. NIPSCO's difficulty getting the project through a local planning meeting illustrates how political friction at the permitting stage could slow the data centre buildout that equity analysts have priced into utility valuations across the US.⁵ BP and its peers are positioned to supply the gas that data centres need. They are not positioned to capture the value. The Economist framed the question directly: why is big oil missing the AI energy bonanza? The answer is that oil majors sell molecules, not electrons. The firms building data centres want long-duration power purchase agreements with utilities and independent power producers, not commodity gas supply contracts.³ The offshore wind retreat makes the disconnect worse. BP divesting 11.5 GW of wind capacity means walking away from exactly the kind of long-duration contracted power generation that data centre operators are seeking. The projects may find new owners who are willing to absorb the construction and grid-connection risk that BP and Total have decided is not worth carrying. But the timing is awkward: divesting clean generation capacity at the moment when demand for firm clean power has never been higher.² European energy politics add another layer. The Guardian reported that the UK government's energy price cap has produced a familiar cycle: initial dismissal by industry followed by accommodation once the politics proved overwhelming. SSE imposed a self-described freeze on bills for its 5 million domestic customers, though the freeze came soon after an 8.2% rise and excluded small businesses. The pattern of public pressure forcing utility behaviour is not unique to the UK, and it constrains how quickly energy majors can pass wartime input costs through to consumers.⁴ The number to watch is BP's wind divestment price. If the 11.5 GW of offshore capacity sells at a steep discount, it signals that the market has repriced European offshore wind risk permanently. If it sells at par, the problem was BP-specific capital discipline, not a sector-wide retreat.