REM: BP retreats from offshore wind with JERA JV, eyes profits amid energy transition

BP’s strategy shift is taking shape as the oil giant scales back its offshore wind ambitions through a new joint venture with Japan’s JERA. The 50-50 partnership, called JERA Nex BP, is set to merge BP's offshore wind operations with JERA’s assets, creating a platform with a potential generation capacity of 13 GW.

This move marks a significant departure from BP's earlier push to become a leader in renewable energy, reflecting a broader trend across the industry. Rivals like Shell and Equinor are also cutting back on wind projects to boost short-term profits from oil and gas, an area that offers higher returns, as reported by Japan Times.

BP’s CEO, Murray Auchincloss, has been under scrutiny since taking the helm in January, as the company’s shares have underperformed compared to rivals. While BP’s stock has risen by 2.5% recently, it has still dropped by 17% in 2024, a stark contrast to Shell's 2.5% decline. Analyst Giacomo Romeo of Jefferies believes this joint venture aligns with BP's broader aim to rein in capital spending, potentially reducing it below $16bn annually while divesting assets worth over $3bn.

Offshore wind was once central to former CEO Bernard Looney’s plan to decarbonise BP’s operations and ramp up its renewable energy portfolio. However, Auchincloss has opted for a more pragmatic approach, focusing on the most profitable sectors. He stated that the new venture will be “a very strong vehicle to grow into an electrifying world” while maintaining a capital-light model for BP's shareholders.

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