BP has boosted its presence in bioenergy, snapping up American biogas company Archaea Energy in a $3.3bn (£2.9bn) deal.
The energy giant has secured the firm to help speed up the growth of its bioenergy business, one of five strategic divisions BP intends to grow rapidly through this decade.
It will also take on around $800m in net debt, with the acquisition subject to both regulatory and Archaea shareholder approval.
The company expects the investment into the businesses to reach more than 40 per cent of its total annual capital expenditure by 2025, aiming to grow this to around 50 per cent by 2030.
Bioenergy is a form of renewable energy that is derived from recently living organic materials known as biomass, which can be used to produce transportation fuels, heat, electricity, and products.
Acquiring Archaea will also boost its presence in the US, helping to support its decarbonisation goals in the world’s biggest economy.
The energy giant aims to reduce its carbon intensity to net zero by 2050 or sooner.
BP chief executive Bernard Looney said: “Archaea is a fantastic fast-growing business, and BP will add distinctive value through our trading business and customer reach. It will accelerate our key bioenergy growth engine, creating a real leader in the biogas sector, and support our net zero ambition.
Nick Stork, chief executive of Archaea Energy, said: “Archaea has become one of the largest and fastest growing RNG platforms in the US and today’s announcement will further enable this business to realise its full potential.”
BP has committed to invest £18bn in the UK’s energy sector over the current decade, chiefly in low and zero carbon projects.
It also unveiled record quarterly profits of nearly £7bn this summer amid soaring oil and gas prices.