BP moves offshore wind to joint venture as moves away from renewables

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British oil company British Petroleum (BP) and Japan’s largest power firm JERA have created an equally owned joint venture to create one of the world’s biggest global offshore wind businesses.

BP and JERA agreed to invest up to $5.8bn (€5.51bn) by 2030, and BP’s share is up to $3.25bn (€3.09bn). The move signals a change in BP’s commitment towards the green transition. Previously the energy giant had pledged to invest $10bn (€9.5bn) between 2023 and 2030 in developing renewable energy capacity.

“We are very pleased to have reached an agreement with JERA to form a top five wind developer globally, “said BP’s CEO Murray Auchincloss. “This will be a very strong vehicle to grow into an electrifying world while maintaining a capital-light model for our shareholders. We very much look forward to combining our strengths in Europe and Asia-Pacific to create another innovative platform.”

JERA owns and operates wind farms in Belgium, Germany, Japan and Taiwan and has a development portfolio that includes projects in Japan, Ireland, and Australia. BP has wind energy development projects in the UK Irish Sea, and in Germany’s North Sea, and owns secured leases off Scotland and the east coast of the United States. 

The new standalone entity is to be called JERA Nex bp, and the two companies’ assets and development projects all included have a total 13GW potential net generating capacity.

Initially, the new company is expected to focus on progressing existing projects in North-West Europe, Australia and Japan.

According to Reuters, BP’s head of offshore wind Matthias Bausenwein is leaving the company.

Lowering investments in renewables and creating the joint venture to spin off the offshore wind projects are seen as part of a turnaround from the oil giant.

BP has been going through a rough period, since the previous CEO Bernard Looney’s sudden resignation last September. The company’s share price lost more than 15% year to date. The new CEO, Murray Auchincloss has been scaling back BP’s green strategy including the previous target of cutting oil and gas output by 2030, in order to regain investor confidence.

The oil giant’s rivals, including UK-based Shell and Norwegian Equinor, are also scaling back green targets. Equinor is reportedly reducing its renewables division workforce and Shell has announced that it would not initiate any new offshore wind energy projects, but it would keep its currently owned wind farms in Europe, the US and the UK.