bp’s Post

bp and JERA agreed to set up a 50:50 joint venture that will become one of the largest global #offshore #wind developers, owners and operators. bp and JERA will contribute operating and development assets totalling 13 gigawatts of potential net generating capacity. #JV #Reneweable #offshorewind #sustainability

bp continues refocus on oil and gas, spinning offshore wind business into new JV with JERA. The 50:50 joint venture - JERA Nex bp - merges capacity of up to 13 GW and will see the new company invest up to $5.8 Bn by 2030. bp will provide $3.25 Bn of that. DEVEX increases, supply chain issues, and inflation have all contributed to challenging business conditions for wind operators in recent times, with some license rounds struggling to attract bids where governments (eg UK previously and more recently Denmark) have proven slow to adapt their terms. Japanese firm JERA is owned by Tokyo Electric Power Company and Chubu Electric Power Co., Inc. The company entered the offshore wind arena back in 2019 and later created JERA Nex. The organisation brings with it assets in Europe, Asia and Australia. bp moved into offshore wind the same year and has a development pipeline of around 9.7 GW focused in the UKCS, Germany, and the East Coast of the US. #oilandgas #renewables #offshorewind #bp #energy #wind #energytransition

This makes a lot of sense to me. Whilst I understand the pressures the Majors have on them from the transition, I would buy BP shares because I wanted to go long oil and gas. If I wanted to go long renewables, I wouldn’t buy shares in a Major. The drive to simplify the business must continue. Non-core aspects of the business need to be carved out and management focused on the core profit centres only, not discussing other things every day. The days of E&P being the backwater of a Majors business need to end. I am long both BP & Shell, but for a different reason actually. I’m anticipating that they either become an M&A target, combine or, at the very least, leave their London listing. Any of those events would unlock a huge valuation boost for both companies. A combination and NYSE primary listing (i.e not ADR) would surely double their valuation. This would also, unfortunately, rapidly hasten the demise of the already rapidly failing London equities market, but I would hope the boards of both companies are focused on their fiduciary responsibility to act for the benefit of their shareholders and not just protect an exchange and regulator that has lost its way and everything else associated with it.

bp plc agreed to spin off its offshore-wind business through a deal with JERA Co. Inc. to form a new joint venture company to be called JERA Nex bp.  The 50-50 JV was created with the aim of advancing existing wind projects, but bp said the standalone business will "significantly reduce BP’s anticipated investment into renewables through the rest of this decade."  The combine will hold a mix of operating assets and development projects. Operating assets currently stand at around 1 Gw net generating capacity, while development projects hold around 7.5 Gw capacity. Secured leases contain about 4.5 Gw of potential capacity, the companies said in a joint release Dec. 9.  The partners agreed to provide capital funding for investments committed to before end-2030 of up to $5.8 billion. 

Dear network - please join me and the PA offshore wind team next Wednesday (15.00 UK time) for the next in our Energy Webinar series "Navigating offshore wind: Trends, strategies and auction insights" - see link below

BP Plc and Jera Co., Japan’s biggest electricity producer, will merge their offshore wind businesses as the British oil major seeks to cut its exposure to the troubled green power sector. The new company — JERA Nex bp — will be funded with as much as $5.8 billion through 2030, a downgrade on BP’s previous investment plans in the technology. It comes as BP limits exposure to the high costs of renewable power while seeking to reassure investors who are more interested in the stronger returns from the company’s core fossil-fuels business. Soaring costs in recent years have upended the investment plans of some of the world’s biggest players in offshore wind. At the same time, BP has faced shareholder pressure over its energy transition strategy, first launched in 2020, as renewables profit has shrunk while oil and gas margins have risen. The company recently indicated it won’t grow its pipeline of offshore wind further, and it saw the departure of an executive who had been brought in to expand that business. BP will significantly limit its investment in offshore wind through the joint venture, contributing as much as $3.25 billion through the early 2030s. That’s less than half of the major’s previous estimates of what it could spend on offshore wind this decade. The new entity, to be based in London, will include both companies’ offshore wind assets, including two projects planned by BP off the coast of the UK. BP won development rights for the British projects with a record-setting bid that came to signify the peak of the offshore wind hype cycle.  The joint venture will first focus on existing projects in Europe, Australia and Japan. Its CEO will be nominated by Jera and the chief financial officer by BP, according to the statement. #BP #JERA #OffshoreWind #OffshoreWind #OffshoreWindFarm #Britain #Japan #Energy #Power #energyTransition #EnergyPolicy #Finance #Investment #RenewablePower #PowerProduction #powergeneration #Economy #COP29 #Oil #Gas #NaturalGas #hydrogen #EnergyDemand #EnergyProduction #BritishPetroleum #TokyoElectric #ChubuElectric

The next webinar in PA's Energy & Utilities Talks series, 'Navigating offshore wind: Trends, strategies, and auction insights' will be taking place on March 27th from 15:00 to 16:00 GMT PA Consulting's offshore wind experts will share key trends and challenges shaping the industry, from strategic divestments and acquisitions to the evolving auction formats. Book your spot now to attend. #EnergyTransition

We've built way more offshore windfarms than we need. And they're dead straight-forward to invest into given government policies, auction rules and market designs never change. Ahh, maybe not. Actually, definitely not! I don't know if Alon Carmel is the Mr Miyagi or the Obi-Wan Kenobi of offshore wind, but join him, Wen-Yu Weng, Carl Gustav Gordon and Mark Repsher on Wednesday (yes in two days' time) 27 March from 15.00-16.00 GMT to find out which offshore wind markets are most attractive and how to secure a cutting edge in upcoming auctions. #PAConsulting #EnergyandUtilities #EnergyTransition

Gran Tierra's move to acquire i3 Energy is an exciting development that could reshape the landscape of the oil and gas sector. It's promising to see companies like Gran Tierra taking bold steps to grow and innovate. I'm looking forward to witnessing the positive outcomes this deal could bring to the industry. #OilAndGas #EnergySector #MergersAndAcquisitions #GranTierra #i3Energy #IndustryGrowth #EnergyInnovation #OilIndustry

I'm really looking forward to this webinar - learning more about sustainable energy has been a goal for some time, now compounded by the personal stories of friends and family who've experienced the impact of rising energy costs and behavioural change as a result. Click the link below to register if you're interest 👇 👇