BP will move all of its offshore wind business into a 50/50 joint venture with Jera, Japan’s largest power generation company, as it switches back from investing heavily in renewable energy to refocus on its core oil and gas business.  

The new London-based company, called Jera Nex bp, will combine Jera’s 1GW of operating wind farms with BP’s long development pipeline, to have a potential capacity of 13GW. BP will inject up to $3.25bn of capital funding, while Jera will contribute $2.55bn.  

BP, which previously pledged to be a “world leader in offshore wind”, has pulled back from renewables under current chief executive Murray Auchincloss to focus instead on oil and gas.

Its decision follows the signal from Shell last week that it did not intend to initiate any new offshore wind projects, as it too retreats from renewable generation.  

Auchincloss said the new joint-venture would be a “top five wind developer globally” and also represented “a capital-light model for our shareholders”. One person close to the company underlined that BP’s capital contribution was a “ceiling, and a significantly lower amount of equity than would have been in the plan this decade”.  

BP noted in October that its capital expenditure had increased by $900mn to $4.5bn in the third quarter, “largely driven” by payments for its two large offshore wind projects in Germany. Analysts questioned whether the company could afford to keep investing at such a level while also maintaining its current share buyback and dividend policy.  

BP declined to comment on whether the new company would lead to a change in its stated target to have taken a final investment decision on 50GW of renewable energy projects by 2030. The company is expected to set out its medium-term strategy at a capital markets day in February.  

Jera said it would nominate the chief executive of the new company, while BP was likely to put forward the chief financial officer. Nathalie Oosterlinck, chief executive of Jera’s renewable power business, said the offshore wind industry was at “an inflection point”.  

“I’ve been in offshore wind for 15 years. Everybody knows that it’s not easy currently, a lot of players are having difficulties because of inflation and rising costs. Others are walking away and we are finding ways to make it work,” she said.  

“We have operating assets and BP has a pipeline of projects. The combination of all the assets is a wonderful combination for the future,” she added. 

Oosterlinck declined to comment on how the company would be treated on Jera’s balance sheet, or on which projects the company would focus as it looked across its portfolio.