(Bloomberg) — BP Plc and Jera Co., Japan’s biggest power producer, will merge their offshore wind businesses and invest as much as $5.8 billion in the joint venture before the end of the decade, according to a statement released on Monday.
The new company — JERA Nex bp — has the potential to limit BP’s financial exposure to the sector, after the energy major’s bet on offshore wind turned sour in recent years.
The industry has grappled with soaring costs that have upended investment plans of some of the world’s biggest players. BP has faced pressure from shareholders over its energy transition strategy, first launched in 2020, as renewables profit shrank while oil and gas margins rose.
“This will be a very strong vehicle to grow into an electrifying world, while maintaining a capital-light model for our shareholders,” BP Chief Executive Officer Murray Auchincloss said of the new venture.
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.
JERA Nex bp 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. The deal is expected to complete by the end of the third quarter of 2025.
Jera, a 50-50 venture between Tokyo Electric Power Co. and Chubu Electric Power Co., was created in 2015 to become one of the world’s biggest liquefied natural gas buyers. The firm said in May that it plans investments in LNG, renewables and hydrogen.
Bank of America is a financial adviser to BP in creating the new entity, while Rothschild is advising Jera.
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