BP is moving into offshore wind power for the first time with a $1.1 billion investment in the United States, as the company pushes into clean energy following a century of oil exploration.
BP said in a statement on Thursday that it will buy a 50% stake in Equinor's Empire Wind and Beacon Wind projects on the east coast of the United States. Together, they have the potential to power more than 2 million American homes.
"This is an important early step in the delivery of our new strategy and pivot to truly becoming an integrated energy company," BP CEO Bernard Looney said. "Offshore wind is growing at around 20% a year globally and recognized as being a core part of the world's need to limit emissions."
BP unveiled a major strategic overhaul last month to deliver on its promise of net zero emissions by 2050. The company plans a 10-fold increase in annual low carbon investments to $5 billion by 2030, when it expects its oil and gas production to have fallen by 40% on 2019 levels.
The deal with Norway's Equinor is expected to close early next year and could pave the way for further investment into the fast-growing US offshore wind market. BP already has a significant onshore wind business in the United States, where it employs about 14,000 people and more than 40% of its shares are held.
Equinor said the companies will consider future opportunities in the country.
"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," CEO Eldar Sætre said in a statement.
The Empire Wind and Beacon Wind developments are located off New York City and the Massachusetts coast respectively. Equinor commissioned the world's first floating offshore wind farm in 2017 off the coast of Scotland and is building offshore wind clusters in the North Sea, the US east coast and the Baltic Sea.
Together with Danish multinational Orsted, it is spearheading the Ocean Renewable Energy Action Coalition, which launched in January and seeks to advance sustainable deployment of ocean-based renewable energy.
BP said last month that its plan to pivot away from oil will involve major investments into bioenergy, hydrogen and carbon capture and storage. At the same time, BP will reduce its oil and gas refining portfolio and aims to raise $25 billion by selling assets over the next five years.
The company was handed the largest environmental fine in US history following the Deepwater Horizon oil spill in the Gulf of Mexico, and in 2015 it agreed to a $20.8 billion settlement with the Department of Justice to settle claims. BP said in 2019 that the disaster had cost the company $67 billion in fines, clean up costs and litigation.