BP spends $1.1 billion to join offshore wind market

BP is to buy 50 percent stakes in two US developments from Norway’s Equinor, a significant step by the oil firm toward its energy transition goals. (AFP)
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Updated 11 September 2020

BP spends $1.1 billion to join offshore wind market

  • Oil and gas company aims to up renewable power generation capacity by 20 fold

LONDON: BP entered the offshore wind market on Thursday with a $1.1 billion deal to buy 50 percent stakes in two US developments from Norway’s Equinor , a significant step by the oil firm toward its energy transition goals.

The British oil and gas company has set itself a target of increasing its renewable power generation capacity by 20 fold in the coming decade to 50 GW.

“This is an important early step in the delivery of our new strategy and our pivot to truly becoming an integrated energy company,” BP Chief Executive Bernard Looney said in a statement.

The deal with Equinor, which could be followed by further joint expansion, makes BP co-owner of the Empire Wind project off New York, as well as Beacon Wind off Massachusetts, which could together generate up to 4.4 gigawatts, enough power for more than two million homes.

Equinor said that the two companies are establishing a strategic partnership for further growth in offshore wind in the US, with both bottom-fixed and floating facilities.

“The transaction is in line with Equinor’s renewable strategy to access attractive acreage early and at scale, mature projects, and capture value,” it said.

Equinor, which will remain the operator of the projects through the development, construction and operation phases, said the deal is expected to close in early 2021.

BP already has a large onshore wind business in the US with a capacity of about 1.7 GW, but has refrained in the past from entering the offshore wind market.

Equinor will make a gain of $1 billion from the sale of the two projects, one analyst said, challenging the assumption that renewable projectss do not offer the same return as oil and gas developments.

“With these returns for a farm-down it looks like Equinor has been (at) the very forefront of securing attractive acreage with huge value creation potential,” said Teodor Sveen-Nilsen, a SpareBank 1 Markets analyst. 

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China aims for sustained and healthy economic development

Updated 30 October 2020

China aims for sustained and healthy economic development

  • Beijing to let market forces play decisive role in resources allocation, report says

BEIJING: China is targeting sustained and healthy economic development in the five years to 2025, with an emphasis on a higher quality of growth, the Xinhua news agency said on Thursday, citing the ruling Communist Party’s Central Committee.

President Xi Jinping and members of the Central Committee, the largest of the ruling party’s elite decision-making bodies, met behind closed doors from Monday to lay out the 14th five-year plan, a blueprint for economic and social development.

China’s external environment “is getting more complicated,” the agency said, adding, “There is a significant increase in instabilities and uncertainties.”

BACKGROUND

China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

However, the country’s development was still in a period of important strategic opportunities, despite new challenges, it said.

It added that China aims to boost its gross domestic product (GDP) per person to the level of moderately developed countries by 2035, while GDP is due to top 100 trillion yuan ($15 trillion) in 2020.

China will also deepen reforms and let market forces play a decisive role in resources allocation, the agency said.

China will promote a “dual circulation” model, make self-sufficiency in technology a strategic pillar for development, move to develop and urbanize regions, and combine efforts to expand domestic demand with supply-side reforms, it added.

The “dual circulation” strategy, first proposed by Xi in May, envisages that China’s next phase of development will depend mainly on “domestic circulation” or an internal cycle of production, distribution and consumption, backed by domestic technological innovation.