BP will make its first foray into offshore wind power after it today announced a $1.1bn (£845m) deal with Norwegian energy giant Equinor to buy 50 per cent of its US offshore operations.
The acquisition is the latest step in the oil giant’s push into becoming a “integrated energy company”. It plans to develop 50 gigawatts of renewable power by 2030.
The Empire Wind lease, which Equinor acquired in 2016, is located off the coast of New York and has a potential generation capacity of 2 gigawatts with a generating capacity of more than 1m homes.
Beacon Wind, the other lease, is situated off the coast of New England and when developed will provide 2.4 gigawatts of power.
The deal is a significant mark-up for Equinor, which acquired the lease for $135m four years ago.
The first power from the Empire Wind development is expected in the mid-2020s.
BP chief executive Bernard Looney said: “This is an important early step in the delivery of our new strategy and our pivot to truly becoming an integrated energy company.
“Offshore wind is growing at around 20 per cent a year globally and is recognised as being a core part of meeting the world’s need to limit emissions.”
“We look forward to working with BP who share our strong ambition to grow in renewable energy”, said Equinor chief executive officer Eldar Sætre.
“Our partnership underlines both companies’ strong commitment to accelerate the energy transition and combining our strengths will enable us to grow a profitable offshore wind business together in the US,”
The deal comes just a month after BP laid out its new strategy, which will see the firm increase its annual low carbon investment 10-fold to around $5bn a year.
Over the next decade, Looney will attempt to wean the firm off its staple diet by cutting oil and gas production by 40 per cent by 2030.