BP is forming a joint venture with Japan’s power firm JERA to build one of the world’s largest offshore wind businesses. This move reduces BP’s direct investment in renewables as it reassesses its green strategy.
A $5.8 Billion Investment in Offshore Wind
BP and JERA will equally share the joint venture, investing up to $5.8 billion (€5.51 billion) by 2030. BP’s portion is capped at $3.25 billion (€3.09 billion). This is a shift from BP’s earlier commitment of $10 billion (€9.5 billion) for renewables between 2023 and 2030.
BP’s CEO Murray Auchincloss sees this partnership as a way to balance growth and capital efficiency. “This will be a strong vehicle to grow into an electrifying world while maintaining a capital-light model for shareholders,” he said.
Global Reach and Project Focus
The new company, JERA Nex bp, will combine the offshore wind assets of both firms. Together, they have a potential generating capacity of 13GW. JERA’s current projects span Belgium, Germany, Japan, and Taiwan. BP holds wind projects in the UK’s Irish Sea, Germany’s North Sea, Scotland, and the US East Coast.
Initially, JERA Nex bp will focus on advancing projects in North-West Europe, Australia, and Japan.
Strategy Shift Amid Market Pressure
BP’s creation of this joint venture comes as part of a strategic pivot. The company has faced challenges, including the resignation of former CEO Bernard Looney in September and a 15% drop in share value this year.
New CEO Murray Auchincloss has scaled back BP’s renewable targets, including reducing planned cuts to oil and gas production. BP’s rivals, such as Shell and Equinor, are also adjusting their green strategies. Shell will avoid new offshore wind projects, while Equinor is cutting jobs in its renewables division.
BP’s move aims to balance renewable growth and investor expectations, signaling a cautious approach to the energy transition.