Oil & gas giants' renewables spend still 'negligible': BMI

Renewables investment by large oil and gas groups remains “negligible” compared to their core activities, said BMI Research in a report suggesting the transformation of the world’s fossil majors is yet to gain significant traction.

While a large number of oil and gas players have some exposure to clean energy – for example Statoil, Eni, Total, and Shell – their actual spending remains muted, BMI Research said in a note.

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“Whilst the majority of the large oil and gas players are active in the renewables space there has yet to be any substantive large-scale investment.

“For many of the majors, the total investment in green technology and clean energy projects is negligible in comparison with total capital expenditure,” said BMI.

The world’s oil and gas groups are still more focused on improving key competencies within their traditional business model, it added.

But in the longer term capital allocation will see a shift towards renewables and other clean energy investments.

A desire to obtain first mover advantage and to appease shareholders while upholding public relations may offer increasing impetus, said BMI.

“A key facet of this energy transition will be strategic acquisitions of companies with specific resources and expertise outside of the oil and gas companies’ core competencies,” it added.

“The financial clout of the majors supports their ability to enter the renewables sector through larger transactions.”

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