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Why big oil is buying into clean energy

Fossil fuels are facing an uncertain future. In response, Europe’s big oil companies including Shell, BP and Total are venturing into the production, distribution and sale of electricity to industrial, residential and transport markets, in direct competition with traditional multinational utilities such as Enel, Iberola and RWE. This diversification, though small for now, heralds the transition of oil and gas companies into full spectrum energy suppliers.

In the last few years European oil companies notably, Shell, BP, Eni, Equinor and Total have added climate–friendly gas to their business portfolio, a natural extension to their core business of oil production and refining. Natural gas offered a path to growth with the additional merit of technical and operational synergies. In contrast, renewable energy and electricity lie outside the core competencies of big oil and acquisition is the principal entry route.

Investing in Renewables

Some European oil companies have invested in renewables, not only for an added source of revenue, but also as a means to reduce their carbon footprint and earn green credentials. Exceptionally, Norway’s Equinor, has led the development of floating wind farm technologies which has opened new opportunities for offshore wind farms in deep waters off Norway, California and Hawaii, as well using such energy from planned floating wind farms to power some of its North Sea oil rigs.  

Copyright: zstockphotos / 123RF Stock Photo
sustainable clean energy technician with solar panels and wind turbines

Reasons why

Global concern over the impact of climate change culminating in the Paris Accords and the annual warnings from the IPPC of the urgent action required to limit world temperature rises to 1.5 percent, underpin the changing business climate of fossil fuel companies. Heightening public concern is mirrored by increasingly stringent regulations to decarbonise economies. In parallel, investors are waking up to the climate and environmental risks in their portfolios. Hedge fund managers ranging from the New York Pension Fund, the World Bank and Norway’s trillion sovereign wealth funds, have recently announced planned divestments in fossil fuels.     

Read more https://www.fircroft.com/blogs/why-big-oil-is-buying-into-clean-energy-92474135727


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