Oil majors look to renewable opportunities

13 April 2017, Week 14, Issue 553

With oil prices stabilising and renewables becoming more competitive, oil and gas super-majors are beginning to make inroads into the clean energy market. 

At a recent conference in Norway, Norwegian NOC Statoil and France’s Total outlined plans for renewables-focused ventures in new sectors.

Statoil explained that the company would be “repositioning” itself as the energy landscape changed. “Statoil used to be an oil and gas company; now we consider ourselves an energy company,” executive vice president for new energy solutions Irene Rummelhoff told delegates at the Subsea Valley (SSV) conference in Oslo. 

The company has already announced ambitious plans to spend 15-20% of its capex on “new energy solutions” up to 2020, building on previous technology development and investment programmes such as the floating Hywind demonstrator project offshore Aberdeen.

As an E&P company, it considers offshore wind to be the most straightforward use of its expertise. So far it has spent almost 20 billion kroner (US$2.3 billion) on offshore wind, and in 2017 will add three operating projects to its portfolio. Meanwhile, it is cementing its position in the nascent US market following a successful US$42 million bid for a 79,000-acre (320-sq km) lease offshore New York in December 2016, as well as registering speculative interest in projects off Hawaii and Massachusetts.

However, Rummelhoff also told SSV delegates of a potential move into another key renewables sector, stating: “Solar is going to be such an important part of the energy mix that if we want to be a renewable energy company we cannot ignore [it].” The company envisions a more complex energy system which will require a range of “holistic solutions” involving a combination of combined cycle gas turbines (CCGT), batteries, wind and solar, and that this was a “good space for Statoil to be in.”

“We are not going into solar big time as we have with offshore wind, but we have a mandate to test the waters. Our strategy is to pursue opportunities that are already present in our oil and gas business and also to team up with experienced players to learn from,” she added. 

So far it is unclear what form these ventures will take, or what percentage of its planned capex may be deployed in solar, but it does mark a move towards even further diversification for the Norwegian giant. 

Total meanwhile, is already a well-established operator of solar projects via its majority stake in SunPower. The company acquired 60% of the panel producer and project developer for US$1.4 billion in 2011. 

In addition to this, Total senior vice president for Europe & Central Asia Michael Borrell also outlined the potential for further diversification as the company looks to raise its share of renewable energy production from 5% to 20%. 

“Total has [previously] had no wind business, but we are now revisiting that question,” he told the conference’s plenary session.

Adding wind to its interests in solar, and its stake in battery manufacturer Saft, would provide the company with a sound portfolio from which to supply and/or develop clean energy projects.

What is clear is that, whether pursuing opportunity or pushed by necessity, major companies like these no longer see hydrocarbons as their only source of revenue – and neither do investors. 

Edited by

Andrew Dykes

Editor

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