Four Oil Companies Carving out a Path Toward Renewable Energy

Fossil fuels have dominated energy systems across the world. This is true for the entire 20th century, and so far, fossil fuels are still playing a dominant role in the current century, but will it last?

Coal, oil, and gas have fueled the rise of entire economies. In 2019 alone, the oil and gas drilling sector earned a total revenue of $3.3 trillion. That figure is equivalent to the combined GDP of several countries.

But as the world nears the mid-century mark, renewable energy is slowly but steadily becoming a key priority. To better position themselves in this new market, some oil giants have made strides in transitioning to renewables. 

Solar and wind companies, as well as other environmentally focused organizations would do well to examine and learn from the efforts of these titans of industry.

1. Royal Dutch Shell

The company has recently stated that it is not just simply an oil and gas company anymore. It is now an energy transition company.

In May 2016, Royal Dutch Shell created the New Energies division. This new department is focused on diversifying the company’s energy assets. To that end, it will test and explore various renewable energy sources such as hydrogen and biofuels.

In 2017, it announced a sizable new energy investment of $1 to $2 billion annually to pursue its renewable strategy.

2. British Petroleum (BP)

Known as the first oil giant to seriously commit to renewables, BP has had a less than ideal start. The company lost billions in several misguided investments during the early 2000s. At the end of 2010, the Deep Water Horizon spill put a major dent in BP’s ability to pursue renewable energy.

In its effort to climb back into the competition, BP stated that it was prepared to allocate about $500 million annually to prepare itself for a low carbon future.

In 2017, it acquired Lightsource, the largest solar project developer in Europe, for $200 million. Additionally, it has funneled over $300 million of venture capital into emerging and disruptive technologies that can help facilitate green energy.

3. Total

Another traditional oil company that’s been active in pursuing renewables is Total, a French oil major. The company has crafted a strategy to diversify away from oil and make significant headway into the renewables sector.

It is dedicating $500 million per year (approximately three percent of total capital expenditure) for investments in renewable energy.

Total is far from being a new renewable energy player. In the past, it invested in solar photovoltaics and biofuels. But recently, it has been looking to solidify its position as a full-range energy company, making strategic investments in wind energy, electricity retail, and renewable energy storage.

4. Equinor (formerly known as Statoil)

The company’s shift to become a broad energy company is epitomized in its name change. While oil will still be a big part of the business, Equinor has stated that it will focus on growing its renewables business to adapt to the future.

About three to five percent of annual capital expenditure is now dedicated to renewable energy. Its New Energy Solutions unit was established in 2015 to develop a long-term road map for the adoption of renewables.

Meta title: The Four Oil Giants Making the Switch to Renewables

Meta description: Everyone is getting in on the renewable energy action, including the big oil companies. What are their strategies, and how much are they spending?