BP to Raise Investment in Energy Projects

LONDON – BP PLC said Monday it will increase its investment in alternative energy projects through a new business unit, BP Alternative Energy.

BP, which is based in Britain, said it expects to invest up to $8 billion in solar, wind, hydrogen and carbon-abatement technology over ten years.

The investment represents only fraction of BP’s annual $14 billion to $16 billion in capital expenditures but is an eightfold increase from the $1 billion spent over the past decade, Chief Executive John Browne told a press conference.

The company plans to double its solar capacity from the roughly 100 megawatts of capacity it currently has in the United States, Spain, India and Australia.

Browne said BP was also planning a carbon-sequestration project for 2006 and 2007, in which carbon emissions from power plants would be re-injected in fallow offshore gas and oil fields.

Browne said BP looked to hire “several hundred” staff, including engineers, to support its new alternative and renewable energy investment plan, which is among the biggest by an oil major.

Browne said he expects the unit to achieve a 15 percent return on capital.

Friends of the Earth, an environmental organization, welcomed BP’s “modest” shift of emphasis to focus more on alternative energy sources.

American Depositary Receipts of BP fell $1.72, or 2.5 percent, to close at $66.11 on the New York Stock Exchange.