British oil giant BP announced Monday it will “significantly reduce” investment in renewable energy through to 2030, as it combines its offshore wind business with that of Japanese power company Jera.
The equally-owned joint venture, Jera Nex BP, is set to advance the companies’ existing wind projects and create one of the world’s largest global offshore wind businesses.
However, the standalone business will “significantly reduce BP’s anticipated investment into renewables through the rest of this decade”, the British group said in a statement.
Together the companies will invest up to $5.8 billion by 2030, with BP contributing $3.25 billion.
It marks a sharp drop from previous suggestions that BP would invest around $10 billion in offshore wind between 2023 and 2030.
BP chief executive Murray Auchincloss has scaled back on the group’s key climate targets, putting more emphasis on oil and gas to boost profits, since taking the helm in January.
The new venture “will be a very strong vehicle to grow into an electrifying world, while maintaining a capital light model for our shareholders”, said Auchincloss.
The move follows an announcement by rival Shell that it will no longer develop new offshore wind projects and will separate its power division into two connected businesses.
Offshore wind is one of the major sources of renewable energy that Europe is counting on to decarbonise electricity production, but in recent years projects have been mired by soaring costs and supply chain issues.
BP and Shell recently reported falls to their third-quarter profits.