British oil and gas giant BP Plc (LON:BP) announced a pre-tax impairment charge of USD 540 million (EUR 509m) during the third quarter of 2023, connected to its offshore wind ventures in the United States, developed in collaboration with Equinor ASA (OSE:EQNR).
This impairment charge comes in the wake of the New York Public Services Commission's (PSC) decision to deny the request made by BP and Equinor to renegotiate the power purchase agreements (PPAs) associated with the Empire Wind 1 and 2, and Beacon Wind 1 projects.
BP disclosed this pre-tax impairment charge while presenting its results for the third quarter and the first nine months of 2023. The company revealed that BP and Equinor are actively exploring avenues to address inflationary pressures and permitting delays impacting their US offshore wind projects. They are currently assessing the implications of the PSC's ruling.
A few days before BP's announcement, Equinor itself reported a USD-300-million impairment related to these same three projects.
Nevertheless, despite the impairment charge, BP reported a quarterly profit of USD 4.9 billion, a significant turnaround from the USD 2.2 billion loss incurred during the same period in the previous year.
During the reporting period, BP also bolstered its renewables portfolio, increasing it to 43.9 GW net capacity. This expansion was achieved by securing the rights to develop 4 GW of offshore wind projects in Germany.