Equinor to drive renewable investment among majors
BAKU, Azerbaijan, May 29
By Leman Zeynalova – Trend:
Norwegian Equinor company is set to drive renewable investment among majors, Trend reports citing Rystad Energy.
The company estimates that Equinor will spend $6.5 billion in the next three years to build its capital-intensive offshore wind portfolio.
In general, investments in solar and wind energy projects by the world’s oil majors over the next five years are expected to reach $17.5 billion, with some $10 billion, or 57 percent accounting for Equinor, reads the Rystad Energy report.
Equinor is followed by Portuguese operator GALP, directing just under a quarter of its greenfield expenditure to green initiatives.
Rystad Energy’s analysis finds that almost all of the renewable investments by oil and gas players will come from just 10 oil majors, which are collectively poised to spend about $17.5 billion on renewable energy projects over the next five years. This tally, however, pales in comparison to the $166 billion they are forecast to spend on greenfield oil and gas projects during the same period.
With the notable exceptions of Equinor and GALP, the investments in renewables by the other oil giants will not even match the typical capex requirements of a single oil and gas field in their respective portfolios.
“If needed due to the Covid-19 pandemic, a 20 percent capex cut across overall investment portfolios could be achieved while easily avoiding any cuts to renewable projects. GALP and Shell look the most exposed to potential renewable spending cuts, but these companies are not expected to make significant renewable investments in the near term – not before 2024 for GALP and even later for Shell – by which time we expect the oil price will have recovered, thus creating a better environment for investment,” reads the report.
But Covid-19 could also be the catalyst for oil majors to pump more capital into renewables, acquiring assets, developing skills and nurturing the capacity to transition beyond petroleum, according to Rystad Energy.
“The pandemic is creating a number of distressed sellers and reducing acquisition costs for assets and companies, thereby creating opportunities for Big Oil to accelerate its energy transition through acquisitions. And with E&P companies announcing deep spending cuts, we may yet see a ramp up in renewable investments as recent headlines suggest, facilitated by new mergers and acquisitions,” reads the report.
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