BP has agreed a deal to put all its offshore wind projects into a joint venture, as the company shifts its focus from renewables to oil and gas projects.
The oil giant, which has said it wants to be “a global leader in offshore wind energy”, said the joint venture with Japan’s largest energy producer would see it invest up to $5.8 billion in existing offshore wind projects. end of the decade.
The partnership with Jera means BP’s spending on offshore wind energy will fall sharply between 2023 and 2030 from previously expected investments of $10 billion (£7.8 billion).
The company said the deal will create one of the world’s largest global offshore wind companies and will also “significantly reduce BP’s expected investments in renewables over the remainder of this decade”.
Its shares rose as much as 3.9 percent, its biggest gain since April, after it announced the acquisition, which will initially focus on existing projects in northwest Europe, Australia and Japan.
Over the summer, BP suspended all new offshore wind projects as its CEO shifted its focus to fossil fuels.
Murray Auchincloss, who became permanent head of the company at the beginning of this year, also froze hiring in the offshore wind division.
Investors have been unhappy with the company’s performance since it began a green push under former boss Bernard Looney, who set a goal of “laying the foundations” for a renewables-focused company and net-zero emissions by 2050 to reach.
BP’s share price has fallen more than 30% since the start of 2023 and more than 16% this year. Rival Shell’s share price has fallen less than 2% in the same period.
The company said on Monday that the deal with Jera would focus on “disciplined and value-driven development”.
Yukio Kani, CEO of Jera, said the wind energy sector was “at a turning point”.
Mr Auchincloss said: “We are very pleased to have reached an agreement with Jera to form a top five wind developer globally.
“This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders.
“We are very much looking forward to joining forces in Europe and Asia Pacific to create another innovative platform.”
The move follows an announcement by rival Shell that it will no longer develop new offshore wind projects and will split its energy division into two related companies.
Offshore wind power is one of the main sources of renewable energy that Europe is counting on to decarbonize electricity production, but in recent years projects have been mired by rising costs and supply chain issues.
