French oil company Total has bought a 51 per cent stake from utility SSE in the development of a massive wind farm off the coast of Scotland.
The £70 million investment ($88m/Dh323m) in the Seagreen 1 wind farm will be Total’s first significant foray into offshore wind as it seeks to expand its green energy business. SSE could also be in line for future payments of £60m based on certain performance conditions, Total said.
As European countries increasingly turn to wind farms at sea to deliver low-carbon power, the project is a first step for the oil major to become a significant player in the industry.
As part of an announcement that it reached financial close on the 1,140 megawatt project, SSE said it’ll also buy 30 per cent of the wind farm’s power capacity. Last year, the company secured a contract with the government to sell about 40 per cent of the power at a fixed price of £41.61 per megawatt hour.
“It could be the perfect project for exposure to evolving offshore wind projects,” said Tom Harries, a wind analyst at BloombergNEF. “If you are an oil and gas company wanting to go big in offshore then you want to know how future projects might look, not the old stuff.”
SSE Renewables was advised by Jefferies International Limited and Linklaters on the transaction. Total was advised by RBC Capital Markets.
The mix of government-guaranteed prices and market exposure could be a glimpse of the future as green power shifts away from a reliance on subsidies. Oil companies, with their big balance sheets, have an opportunity to play a key role in that transition. Seagreen will be the first offshore wind farm in the UK that doesn’t have full government support.
Total now has stakes in 5 gigawatts of renewable-power capacity. It targets a portfolio of 25 gigawatts by 2025.
SSE’s renewables arm will lead the development and construction of the Seagreen wind farm, which is expected to cost £3 billion to construct, including £500m for transmission, SSE said in a statement.
Designed to cover the energy needs of around 1 million homes, the project will be completed by 2023. Once finished, it’ll be Scotland’s largest offshore wind farm.
The purchase agreement also includes a potential extension to capacity of up to 360MW. The transaction remains subject public authorities approval and should be finalized by July 2020.
MHI Vestas Offshore Wind A/S will deliver 114 10-megawatt turbines for the project.
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Email sent to Uber team from chief executive Dara Khosrowshahi
From: Dara
To: Team@
Date: March 25, 2019 at 11:45pm PT
Subj: Accelerating in the Middle East
Five years ago, Uber launched in the Middle East. It was the start of an incredible journey, with millions of riders and drivers finding new ways to move and work in a dynamic region that’s become so important to Uber. Now Pakistan is one of our fastest-growing markets in the world, women are driving with Uber across Saudi Arabia, and we chose Cairo to launch our first Uber Bus product late last year.
Today we are taking the next step in this journey—well, it’s more like a leap, and a big one: in a few minutes, we’ll announce that we’ve agreed to acquire Careem. Importantly, we intend to operate Careem independently, under the leadership of co-founder and current CEO Mudassir Sheikha. I’ve gotten to know both co-founders, Mudassir and Magnus Olsson, and what they have built is truly extraordinary. They are first-class entrepreneurs who share our platform vision and, like us, have launched a wide range of products—from digital payments to food delivery—to serve consumers.
I expect many of you will ask how we arrived at this structure, meaning allowing Careem to maintain an independent brand and operate separately. After careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each. Over time, by integrating parts of our networks, we can operate more efficiently, achieve even lower wait times, expand new products like high-capacity vehicles and payments, and quicken the already remarkable pace of innovation in the region.
This acquisition is subject to regulatory approval in various countries, which we don’t expect before Q1 2020. Until then, nothing changes. And since both companies will continue to largely operate separately after the acquisition, very little will change in either teams’ day-to-day operations post-close. Today’s news is a testament to the incredible business our team has worked so hard to build.
It’s a great day for the Middle East, for the region’s thriving tech sector, for Careem, and for Uber.
Uber on,
Dara
