BP spends $1.1 billion to join offshore wind market

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

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. 


Market traders ready to ride ‘Biden bounce’

Market traders ready to ride ‘Biden bounce’
Updated 19 January 2021

Market traders ready to ride ‘Biden bounce’

Market traders ready to ride ‘Biden bounce’
  • "Biden moving into the White House could drive markets into a bull run more sharply than previous inaugurations," a financial expert says

DUBAI: Investors are expecting a “Biden bounce” in global markets following the inauguration on Wednesday of Joe Biden as the 46th US president.

“History teaches us that we can expect the markets to react favorably to the inauguration of a new US president — and this time around it is likely to be no different,” said Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisers, with over 80,000 clients and $12 billion under advisement.

“Indeed, Biden moving into the White House could drive markets into a bull run more sharply than previous inaugurations because it is hoped the incoming administration will bring stability and, possibly, a halt to the uncertainty following the fiercely contested election. 

“Investors will also be buoyed by the $1.9 trillion fiscal stimulus announced by Biden, the Federal Reserve’s willingness to support markets, the new president’s multilateral trade agenda and his plans for stepping up the vaccine rollout. All of this will encourage confidence and optimism,” Green said.

Mazen Al-Sudairi, head of research at Riyadh-based financial services company Al Rajhi Capital, agreed with the optimism regarding a “Biden bounce.”

“One of the important outcomes with Biden is stability in the market. But there is also the stimulus factor coupled with the vaccine that is giving an indication of recovery in the market. This perceived unity in the US will be healthy for the global and Saudi market,” he told Arab News.

However, Green said that investors should be cautious for three reasons: “First, a market rally is going to be difficult to sustain indefinitely due to the enormous economic scarring caused by the pandemic.

“The major long-term headwind is mass unemployment, which is hitting demand, growth and investment on Main Street and which, ultimately, will have to impact Wall Street.

“Second, the new administration will have policies that will have an effect on different sectors of the economy. There will be a readjustment period that needs to be taken into account.

“And, third, not all shares are created equal and stock markets are heavily unbalanced at the moment. A handful of sectors are bringing up entire indexes,” he said.