BP is joining forces with Japan’s largest power company, JERA, to create a major player in offshore wind energy. The move reduces BP’s direct investment in renewables as it adjusts its green strategy.
$5.8 Billion Investment in Offshore Wind Energy
BP and JERA will each hold a 50% stake in the new joint venture, committing up to $5.8 billion (€5.51 billion) by 2030. BP’s share of the investment will be up to $3.25 billion (€3.09 billion). This marks a shift from BP’s original plan to invest $10 billion (€9.5 billion) in renewables by 2030.
BP’s CEO, Murray Auchincloss, described the joint venture as a way to balance growth with shareholder value. “This will help us expand in an electrifying world while maintaining a capital-light model for our investors,” he said.
Combining Strengths in Europe and Asia-Pacific
The new company, called JERA Nex bp, will manage wind projects from both BP and JERA. Combined, these assets have the potential to generate 13GW of power.
JERA operates wind farms in Belgium, Germany, Japan, and Taiwan. It also has projects in development in Japan, Ireland, and Australia. BP’s wind projects are located in the UK’s Irish Sea, Germany’s North Sea, Scotland, and the US East Coast. The initial focus will be on advancing projects in North-West Europe, Australia, and Japan.
BP Recalibrates Its Green Transition
The creation of this joint venture signals BP’s broader strategic shift. The company has faced challenges, including the resignation of former CEO Bernard Looney in September and a 15% drop in its share price this year.
New CEO Murray Auchincloss is scaling back BP’s green targets to regain investor confidence. This includes reducing planned cuts to oil and gas production. BP’s competitors, such as Shell and Equinor, are also pulling back from renewables. Shell is halting new offshore wind projects, while Equinor is reducing its renewables workforce.
BP’s new approach aims to balance renewable energy ambitions with financial stability and investor expectations.