BP Shares Underperform as Firm Rumoured To Be Seeking Buyers for US Gas Pipeline

BP shares (LON: BP) have significantly underperformed the broader FTSE 100 index this year, with a loss of 20.06% YTD standing in stark contrast to the Footsie's 7.88% gain. In the last hour, the stock has turned red on the day, down 0.71% as rumours emerged on Reuters that the firm is actively seeking buyers for a portion of its U.S. natural gas pipeline network as part of a strategic move to address the company’s increasing debt levels.

The potential sale could bring in up to $3 billion for BP, aligning with CEO Murray Auchincloss's strategy to reduce the company's financial obligations.

The oil and gas giant is said to be considering selling up to a 49% stake in its U.S. pipeline network. This network includes around 1,500 miles of pipelines and transports approximately 1.1 million barrels of natural gas per day. This decision comes as BP's net debt rose to $24.3 billion by the end of September 2023, up from $22.3 billion a year earlier.

In addition to the pipeline stake, BP is planning to divest stakes in its solar and U.S. wind operations. These moves are part of a broader strategy to streamline operations and focus on reducing debt.

The U.S. oil and gas pipeline industry is currently undergoing consolidation, making BP's assets potentially attractive to buyers in the sector. However, it is important to note that BP itself has not publicly commented on the sale, relying on anonymous sources to provide information.

This move by BP is seen as critical to improving financial sustainability and realigning its portfolio to better cope with energy market fluctuations and growing debt. As the search for buyers continues, the future of its U.S. pipeline operations remains a focal point for stakeholders and investors alike.