Big Oil has frequently been chided for merely trying to burnish its green credentials, and so far, it has done little to convince us that it is truly moving forward to greenness. Despite the much-vaunted megatrend involving the global electrification drive and shift to renewable energy, the most ambitious pledges by Big Oil to pursue net-zero agendas remain weak at best.
An analysis of near-term spending plans on renewables by the biggest oil and gas companies shows that real investments in renewable energy will continue to pale in comparison to capex plans for greenfield fossil fuel projects.
Let this sink in: In 2018, Big Oil spent less than 1% of its combined budget on green energy projects.
Further, according to Rystad Energy, Big Oil is expected to pump in $166B into new oil and gas ventures over the next five years, thus dwarfing the currently specified outlay of just $18B (less than 10% of capex) for solar and wind energy projects. Indeed, much of Big Oil’s reduction in greenhouse gas (GHG) emissions leans on the so-called natural gas bridge.
Good case in point: Italian multinational oil and gas giant Eni S.p.A. (BIT:ENI) recently unveiled what has been hailed as the most ambitious climate pledge yet by an oil supermajor. Eni has announced plans to cut down its greenhouse gas emissions by 80% over the next three decades. Yet, its natural gas output will still comprise 85% of its total production by the end of the forecast period.
Source: NS Energy
Whereas no Big Oil company is likely to earn its stripes as a true renewables energy outfit over the next decade, here are the best bets that are likely to come closest. Notably, U.S. oil and gas supermajors are conspicuous by their absence on this list.
It is instructive to note that a NOC, and not an independent oil company, has the most ambitious green strategy of them all. Of the $18B that the supermajors plan to invest in clean energy over the next five years, more than half will come from Norwegian state-owned multinational energy company, Equinor ASA’s (NYSE:EQNR) coffers.