BP to pay $1.1bn for stake in US wind project - Financial Times

BP has made its first foray into offshore wind power, agreeing to buy a 50 per cent stake in two US projects from Norway's Equinor for $1.1bn.

The decision to take a stake in the Empire Wind and Beacon Wind assets comes as BP seeks to boost annual investment in low-carbon businesses 10-fold to about $5bn a year.

BP plans to increase renewable power development from 2.5 gigawatts in 2019 to about 50GW by 2030 after chief executive Bernard Looney laid out ambitions for the company to become a net-zero emissions company by 2050.

Mr Looney has said he wants to “reinvent” the company as pressure to tackle climate change increases on the oil and gas industry.

“This is an important early step in the delivery of our new strategy,” said Mr Looney on Thursday. The deal is expected to close in early 2021.

European oil and gas companies have pushed ahead with clean energy plans despite the financial impact of the coronavirus pandemic as fuel demand fell after governments imposed travel bans and lockdowns.

Investors, environmentalists and the public are demanding that fossil fuel companies make drastic changes to their business models to reduce emissions, even as customer demand for oil, gas and even coal remains robust.

BP and Equinor have slashed their dividends to shareholders and their spending on legacy business as they buffer themselves from a slide in their earnings, while continuing to increase their low-carbon expenditure.

While BP was seen by industry observers as moving too soon with its “beyond petroleum” drive under former chief executive John Browne, critics now say it is too far behind rivals and playing catch-up will be costly.

Last month BP said it would partner with other companies to further its clean energy ambitions, acquiring talent and technology while building joint ventures.

As part of the agreement, BP and Equinor will also jointly develop four assets located offshore New York and Massachusetts that could generate power for more than 2m homes. 

Equinor, which will remain the operator of the projects, recently appointed a new chief executive tasked with accelerating the state-controlled oil and gas group’s push into renewable energy.

It has set ambitions to raise its renewables capacity to up to 16GW by 2035 and is working to build scale in its wind power business across the North Sea, the US and the Baltic Sea.

Equinor commissioned the world’s first floating offshore wind farm in 2017 off the coast of Scotland.

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2020-09-10 08:37:01Z
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