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BP is making its first move into the offshore wind market with a strategic partnership in U.S. offshore wind assets with Equinor in a deal worth US$1.1 billion.
Under the agreement the oil giants announced on Thursday, BP will buy 50 percent in Equinor's Empire Wind and Beacon Wind assets off Long Island and offshore Massachusetts, respectively, for US$1.1 billion. Equinor will remain operator of the sites.
Empire Wind offshore New York City is expected to have an installed capacity of 2 gigawatts (GW), providing clean energy to more than 1 million homes, while Beacon Wind offshore Massachusetts is designed to have an installed capacity of 2.4 GW, providing clean and reliable energy to another million U.S. households.
BP's strategic partnership with Equinor will mean that the companies will also explore future offshore wind opportunities in the U.S.
BP's first foray into offshore wind is part of its strategy to reinvent itself as an integrated energy company from an international oil company, in which it pledged last month to reduce its oil and gas production by 40 percent by 2030.
"This is an important early step in the delivery of our new strategy and pivot to truly becoming an integrated energy company," BP's chief executive officer Bernard Looney said in a statement.
"It's a partnership with the world's leading offshore wind developer in the world's fastest-growing market," Looney said on LinkedIn.
"We look forward to working with BP who share our strong ambition to grow in renewable energy. 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," Equinor's CEO Eldar Sætre said.
Equinor is also moving toward becoming a broad energy company—last month it said that its incoming chief executive Anders Opedal – who will replace retiring Sætre in November – has a mandate from the board of directors to accelerate Equinor's transition from an oil company to a broad energy company.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com