Tuesday, February 4, 2025
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In a strategic move, BP has partnered with Japanese power generator JERA to create JERA Nex bp, a joint venture that will become one of the world’s largest offshore wind operators. This collaboration signifies a shift in BP’s renewable energy strategy under CEO Murray Auchincloss, who prioritizes near-term profitability.

BP’s decision aligns with recent trends within the energy sector. Major players like Shell and Equinor are prioritizing oil and gas operations to bolster short-term profits. However, the joint venture with JERA suggests that BP isn’t entirely abandoning renewables.

JERA Nex bp will combine the wind energy assets and development projects of both companies, aiming for a combined generation capacity of 13 gigawatts (GW). This venture positions it among the top five global offshore wind operators, alongside established leaders like Ørsted, Iberdrola, and RWE.

The financial commitment of the partnership reflects its long-term ambitions. JERA and BP have pledged up to $5.8 billion in funding for projects approved by the joint venture by 2030. BP’s contribution will be lower due to its less developed wind assets within the JV.

This move addresses investor concerns surrounding BP’s energy transition strategy under Auchincloss. The company’s stock has underperformed compared to rivals due to uncertainties regarding its commitment to renewables. The JERA Nex bp venture offers a solution, potentially allowing BP to reduce annual capital spending and divest non-core assets.

Previously, under CEO Bernard Looney, BP prioritized rapid development of renewables to reduce greenhouse gas emissions. However, rising development costs, supply chain issues, and inflation have negatively impacted the offshore wind sector in recent years.

Auchincloss’ focus on profitability is evident in BP’s plans to sell its onshore wind business in the United States and a stake in its solar venture, Lightsource BP. He emphasizes that the joint venture offers a “capital-light model” for shareholders while strategically positioning BP for a future driven by electricity.

The formation of JERA Nex bp comes after BP reportedly considered selling a minority stake in its offshore wind business and pausing investments in new projects. Additionally, Matthias Bausenwein, BP’s head of offshore wind, has announced his departure from the company following the announcement.

This news follows a similar trend within Shell, which recently signaled a slowdown in its offshore wind project spending.

JERA Nex bp will leverage the expertise and assets of both companies. The joint venture will initially manage a combined portfolio of approximately 1 GW of operational wind farm capacity and a development pipeline exceeding 7.5 GW. Furthermore, secured leases with an additional 4.5 GW of potential capacity offer room for future expansion.

JERA, formed through a merger between Tokyo Electric Power Company (TEPCO) and Chubu Electric Power, entered the offshore wind market in 2019. JERA Nex, its renewable energy subsidiary, owns and operates wind farms across Europe, Asia, and Australia.

“We can’t grow just by ourselves,” stated JERA CEO Yukio Kani. “We need scale, we need a more diversified portfolio, we need a fuller set of capabilities, and BP is the best choice for us.”

BP’s entry into offshore wind occurred in 2019, with a development pipeline of 9.7 GW focused on the British North Sea, Germany, and the U.S. East Coast. However, the company currently has no operational offshore wind farms.

The new venture will have its headquarters in London, with JERA nominating the CEO and BP appointing the chief financial officer. JERA is expected to recommend Nathalie Oosterlinck, the current CEO of Jera Nex, to lead the joint venture.

The completion of the deal is anticipated by the end of the third quarter of 2025. Bank of America and Rothschild will serve as financial advisors for BP and JERA, respectively.

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