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UPDATE 2-BP to spend $1.1 bln to enter offshore wind with Equinor

Thu, 10th Sep 2020 07:08

(Recasts with BP statement, adds analyst, background)

By Terje Solsvik and Ron Bousso

OSLO/LONDON, Sept 10 (Reuters) - BP entered the
offshore wind market on Thursday with a $1.1 billion deal to buy
50% stakes in two U.S. developments from Norway's Equinor
, a significant step by the oil firm towards 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 gigawatt, enough power for
more than two million homes.

Equinor said the two companies are establishing a strategic
partnership for further growth in offshore wind in the United
States, 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 United
States with a capacity of around 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," Sparebank 1 Markets analyst
Teodor Sveen-Nilsen said.
(Reporting by Terje Solsvik and Gwladys Fouche in Oslo, and Ron
Bousso in London; Editing by Jacqueline Wong, Jan Harvey and
Alexander Smith)

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