Photo caption: BP logo
BP and Japanese power generator JERA have agreed to form a standalone joint venture combining their offshore wind operations, a major step in CEO Murray Auchincloss’ efforts to reduce BP’s focus on renewables.
The 50-50 venture, called JERA Nex bp, will include operating assets and development projects with a potential generation capacity of 13 gigawatts, BP said in a statement.
The partners have agreed to provide up to $5.8 billion in funding for projects approved by the joint venture by 2030, with BP contributing up to $3.25 billion and JERA paying up to $2.55 billion as BP’s assets in the JV have yet to be developed.
BP’s Auchincloss has been under pressure to boost the company’s performance since taking office in January as its shares underperform rivals amid concerns over its energy transition strategy.
Offshore wind was a key pillar of former CEO Bernard Looney’s strategy to reduce BP’s greenhouse emissions by rapidly building up renewables capacity and slowing investments in oil.
Surging development costs, supply chain issues and higher inflation have nevertheless heavily weighed on the offshore wind sector in recent years.
Auchincloss has vowed to take a pragmatic approach by focusing on higher-return operations, primarily in oil and gas, while reducing spending on low-carbon investments.
“This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders,” Auchincloss said in a statement on Monday.
Reuters reported in October that BP was considering selling a minority stake in its offshore wind business, citing sources with knowledge of the matter.
JERA, which is owned by Tokyo Electric Power Company (TEPCO) and Chubu Electric Power, first entered offshore wind in 2019. It later spun out its renewables assets into JERA Nex, which owns and operates wind farms in Europe, Asia and Australia.
BP entered the offshore wind market in 2019. It currently has a development pipeline with a generation capacity of 9.7 GW focused in the British North Sea, Germany and the U.S. East Coast.
