BP’s 2025 Geothermal Play: How the Energy Giant is Hedging its Future with Next-Gen Tech

Industry Adoption: How BP’s Geothermal Strategy Signals a Shift from Venture Capital to Strategic Hedging

Between 2021 and 2024, BP’s engagement in geothermal was a clear example of a targeted venture play. The company’s first and only direct investment in the sector came in February 2021, when BP Ventures co-led a $40 million funding round for Canadian startup Eavor Technologies. This move signaled a cautious but strategically aligned entry, focusing exclusively on Eavor’s Advanced Geothermal System (AGS), a novel closed-loop technology. This approach allowed BP to leverage its core drilling and subsurface expertise while betting on a technology that promised to overcome the geographical and environmental constraints of traditional geothermal power. The strategy was one of exploration and validation, with BP monitoring the success of Eavor’s technical demonstration in New Mexico, which reached depths of 18,000 feet in early 2023, and the launch of its first commercial-scale project in Germany.

The period from 2025 to today marks a significant inflection point. While CEO Murray Auchincloss has initiated a broad portfolio review realigning BP toward its core oil and gas business for “enduring cash flows,” the geothermal venture has notably persisted. This is a critical shift: what began as a venture bet has evolved into a pragmatic, long-term hedge. Unlike other renewable projects, such as the Kwinana and Rotterdam biofuel plants which were halted, the geothermal initiative survived the strategic pivot. This resilience highlights its unique value proposition as a 24/7 low-carbon power source that aligns perfectly with BP’s operational strengths. The technology BP backed received major external validation in June 2025 when the Canada Growth Fund committed C$138 million to Eavor, accelerating its commercial deployment. This transforms BP’s initial bet from a speculative venture into a calculated position in a market that Wood Mackenzie now ranks as a top-five emerging energy technology, projected to attract $1 trillion in investment by 2035.

Table: Key Geothermal Investments Involving or Influencing BP

Table: BP’s Key Geothermal Partnerships and Alliances

Geography: BP’s Concentrated Geothermal Footprint

Between 2021 and 2024, BP’s geothermal activities established a clear geographic pattern centered on North America and Europe. The initial investment was in Canada-based Eavor Technologies. Eavor’s critical technology demonstration took place in New Mexico, USA, while its first commercial-scale project broke ground in Geretsried, Germany. Simultaneously, BP’s participation in the Texas Geothermal Alliance solidified its interest in Texas, USA, as a key region for EGS development. This geographical focus reflects a strategy of operating in regions with established energy infrastructure, skilled workforces, and supportive regulatory environments.

From 2025 to today, this geographic concentration has not dispersed but rather deepened and gained momentum. The C$138 million investment from the Canada Growth Fund reinforces Canada‘s role as a hub for geothermal innovation and finance. The ongoing activities in Texas signal a sustained effort to unlock geothermal potential by repurposing oil and gas expertise. Meanwhile, the project in Germany remains the most critical geographical datapoint, serving as the commercial litmus test for the Eavor-Loop™ technology in a major European industrial market. The risk is that the technology’s success remains confined to these favorable regions; however, the strategic opportunity lies in perfecting the deployment model in these core hubs before attempting a wider global rollout.

Technology Maturity: BP’s Journey from Validation to Commercial Readiness

In the 2021–2024 period, BP’s focus was squarely on validating a next-generation geothermal technology. The company invested in Eavor’s Advanced Geothermal System (AGS), a closed-loop concept that was moving from theory to practice. The key inflection point occurred in January 2023 with the success of Eavor’s deep-drilling demonstration in New Mexico, which proved the technical viability of its “subsurface radiator” design. This milestone shifted the technology’s status from *demonstration* to *first-of-a-kind commercial pilot*, embodied by the Geretsried project in Germany. BP’s parallel interest in Enhanced Geothermal Systems (EGS) via the Texas Geothermal Alliance indicated an awareness of alternative pathways, but its capital was firmly behind AGS.

The period from 2025 to today marks a decisive shift from validation to a focus on *commercial readiness and scalability*. The massive C$138 million funding injection for Eavor is a clear market signal that investors believe the technology is ready to move beyond a single pilot toward accelerated deployment. This is reinforced by Wood Mackenzie’s classification of next-gen geothermal as a top-five emerging energy technology, lending it global credibility. While Eavor’s AGS is on the cusp of scaling, the emergence of potentially transformative technologies like Quaise Energy’s millimeter-wave drilling shows the landscape remains dynamic. The crucial change is in market perception: next-generation geothermal is no longer just a novel concept but a fundable, commercially promising technology class, with BP’s chosen partner, Eavor, positioned as a frontrunner.

Table: SWOT Analysis of BP’s Geothermal Strategy

Forward-Looking Insights and Summary

The most recent data from 2025 signals that BP is executing a sophisticated dual strategy: maximizing near-term cash flow from its core oil and gas portfolio while maintaining a low-cost, high-upside option in a strategically-aligned renewable sector. Geothermal’s survival through the company’s strategic pivot is the clearest signal of its perceived long-term value. Unlike other renewables, it directly leverages BP’s century of subsurface expertise, making it a natural, synergistic hedge against the energy transition.

Looking ahead, market actors should watch three key signals. First is the operational and economic performance of Eavor’s Geretsried project in Germany; its success is the ultimate proof point for commercial scalability. Second is any sign of BP moving beyond venture capital to directly fund or lead a geothermal project, which would mark a true integration of the technology into its core business. Finally, any announcements from Eavor on significant drilling cost reductions will be crucial, as this remains the primary lever for making next-gen geothermal cost-competitive at a global scale. While BP’s broader renewable ambitions may have been tempered, its calculated and persistent engagement in geothermal demonstrates that for oil and gas giants, the most promising energy transition pathways are often the ones that lie right beneath their feet.

Frequently Asked Questions

What is BP’s main investment in geothermal energy?
BP’s primary geothermal investment is a $40 million stake in Canadian startup Eavor Technologies, made in 2021. This partnership focuses on developing Eavor’s Advanced Geothermal System (AGS), a unique closed-loop technology that aligns with BP’s core expertise in drilling and subsurface engineering.

Why is BP’s geothermal strategy now considered a ‘strategic hedge’ rather than a venture investment?
The strategy is now seen as a strategic hedge because the geothermal initiative survived BP’s recent portfolio review that refocused the company on its core oil and gas business. While other renewable projects were cut, geothermal’s alignment with BP’s drilling expertise and its potential as a 24/7 low-carbon power source secured its place as a long-term, calculated option against the energy transition.

What specific geothermal technology is BP focused on, and how is it different?
BP is backing Eavor Technologies’ Advanced Geothermal System (AGS), also known as the Eavor-Loop™. It is a closed-loop system that functions like a large, underground radiator. Unlike traditional geothermal energy, which requires very specific geological conditions, AGS circulates a fluid in a sealed network of pipes, allowing it to be deployed in a much wider range of locations with lower environmental risk.

What are the signs that BP’s bet on Eavor’s technology is paying off?
There are several key indicators of success. Eavor completed a successful technical demonstration in New Mexico in 2023 and has launched its first commercial-scale project in Germany. Most significantly, the technology received major external validation in June 2025 when the Canada Growth Fund committed C$138 million to accelerate its commercial deployment, de-risking BP’s initial investment and signaling market confidence.

How significant is BP’s geothermal investment compared to its core oil and gas business?
BP’s geothermal investment is currently very small compared to its spending on fossil fuels. The company’s $40 million investment in Eavor is dwarfed by projects like the $5 billion Tiber-Guadalupe oil platform approved in September 2025. This shows that while geothermal is a strategically important hedge for the future, BP’s immediate financial priority remains its core oil and gas operations.