When the renewable energy revolution hit the world following the Paris Agreement to reduce carbon emissions, most of us imagined big petroleum producers and suppliers dropping oil and gas and turn to cleaner energy. However, this is far from what top oil and gas (O&G) firms are doing. Instead, these companies integrate renewables, hydrogen, and carbon capture technology to atone for the carbon emission by fossil fuels. Big companies, mainly from Europe, invest millions of dollars in green energy for sustainability since they still want to gain profits.
Some of these companies include Total, BP, Royal Dutch Shell, Eni, Repsol, and Equinor. “This is a very Eurocentric story right now. You have got clear themes that European-based businesses are thinking about decarbonization and diversification. At the same time, Asian and American oil and gas companies are less focused on that,” said David Linden, head of Energy Transition with Westwood Global Energy Group, a UK energy market research and intelligence company.
Linden also said many O&A firms are using different strategies to realize the zero-targets they have set. “You can do many different things to get to a net-zero business. And actually, that is sort of borne out quite interestingly through a lot of these different strategies,” added Linden. Total has set very high goals for its renewable energy portfolio. The company has invested approximately $8 billion in green energy and increased its gross capacity to 7gigawatts (GW). By 2025, Total intends to get its clean energy capacity to 35GW. Some of the renewable energy projects are in progress.
In addition, Total seeks to surpass global giants in green energy such as Iberdrola by reaching the one hundred gigawatts point by the end of this decade. The capacity would be thrice that of Iberdrola and almost fourfold that of Orsted. Netherland’s oil giant Shell plans to invest in a mixture of solar, onshore, and offshore wind projects. Through a new growth strategy, the firm seeks to invest in more service stations, hydrogen biofuels, EV charging network, nature-based solutions, and carbon capture and storage (CCS)
Other firms like BP, Eni, Equinor, and Repsol have laid out plans to increase their renewable energy capacity between now and 2050. “I think with the European oil and gas majors, one theme that is very clear is that they see themselves as broader energy providers,” said Arindam Das, head of consulting at Westwood Global Energy Group.
“Most of the energy companies, by and large, still see the oil and gas business as being substantial and actually driving, or generating the cash flow that drives, the diversification into renewables and other areas,” added Das. BloombergNEF reported that energy companies had invested about $60 billion in renewables, storage, advanced transport, digital technologies, hydrogen, CCS with solar, onshore and offshore wind, and battery storage, carrying the majority over the past five years of funds.