Energy giants BP (LON: BP) and Orsted (CPH: ORSTED) have made a major breakthrough in a dispute over a patch of land in the Southern North Sea.
In a letter published by the UK authorities, the pair revealed that a “commercial agreement has been reached” that will allow two crucial low carbon projects to advance.
Further detail on the nature of the deal was not shared, but BP now has “no remaining objection” to Orsted’s 2.6 gigawatt (GW) Hornsea Four offshore wind farm.
For two years now, oil supermajor BP and green energy giant Orsted have been at loggerheads over a stretch of seabed off the east coast of the UK.
Orsted wants to use the zone, about 40 miles from Yorkshire, to house part of its 180-turbine Hornsea Four wind project.
But BP was concerned that the development would hamper its ability to monitor the Endurance reservoir, which will receive emissions from the Northern Endurance Partnership (NEP) carbon capture and storage (CCS) initiative.
Both schemes were awarded preliminary licences by the UK Government over a decade ago, when it wasn’t thought the overlap would be a problem.
The issue centred on the use of boats, and specifically half-mile long ‘seismic streamers’ to monitor the reservoir, which risked getting caught in the turbines.
Discussions with the seabed manager, Crown Estate, had been rumbling on, with claims that it would not be “feasible” for the two projects to operate side by side.
But a letter to the Secretary of State for Energy Security and Net Zero confirms BP and Orsted have broken the deadlock, with the former removing its objection to Hornsea Four.
“Orsted and BP confirm that a commercial agreement has been reached,” the message states.
“On this basis, Orsted and BP agree that there are no requirements for protective provisions under the Hornsea Four DCO for the benefit of BP or any other party involved in the NEP Project.
“BP has no remaining objection to the Hornsea Four DCO application and agrees to withdraw any and all prior representations made in relation to the Hornsea Four DCO application.”
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