By Christian Moess Laursen


BP will merge its offshore wind-energy business with that of Japanese power-utility JERA to create a combined standalone company, in line with the British energy company's strategy to focus on its more profitable oil-and-gas operations.

The companies said Monday that the equally-owned company, to be called JERA Nex BP, will have 13 gigawatt of potential net generating capacity. They have agreed to invest up to $5.8 billion in the company before the end of 2030.

JERA Nex BP will focus on the development of its existing assets, initially the ones in Northwest Europe, Australia and Japan, while also pursuing new competitive projects.

"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 Murray Auchincloss said.

Since taking office in January, Auchincloss has been under pressure to improve BP's performance. Shares in the storied oil-and-gas major have fallen 17% this year, underperforming the wider sector by around 12%, amid uncertainty around its strategic direction and a weaker balance sheet than those of its peers.

Under Auchincloss, the company has simplified operations and focused on its high-value assets--primarily oil and gas--pivoting from his predecessor Bernard Looney's ambitious energy-transition strategy of cutting hydrocarbon production by 40% by 2030.

Some analysts and market watchers are expecting BP to abandon that target altogether when it updates its medium-term guidance in February.

BP and JERA said the combined company will become one of the largest global offshore wind developers, owners and operators. It will have operating assets with around 1GW net generating capacity, a pipeline of projects with around 7.5GW capacity, and further secured leases with around 4.5GW of potential capacity.

JERA is itself a 50-50 owned joint venture between Tokyo Electric Power Co., known as Tepco, and Chubu Electric Power. In 2023, it bought Belgium company Parkwind which it later used to spin out as a focused renewables company, JERA Nex.

JERA Nex BP will be based in London. Completion is expected by the end of the third quarter next year.


Write to Christian Moess Laursen at christian.moess@wsj.com


(END) Dow Jones Newswires

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