- Oil companies, particularly those based in Europe, are among the most active investors in clean energy and technologies.
- Six of the top companies have invested about $9 billion in the industry since 2016, according to estimates from the research firm Wood Mackenzie.
- For some, including BP, Shell, and Total, the investments are part of a broader strategy to be net-zero emissions companies by 2050.
- Here's how much the oil majors have each spent on clean energy since 2016.
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Big Oil is trying to rebrand itself as Big Energy. And now, many of its constituents can point to more evidence that what they offer does, in fact, extend beyond oil and gas.
On Tuesday, BP revealed a new strategy for how it plans to become a net-zero emissions company by 2050, which included near-term targets. The company is planning to shrink oil and gas production by 40% over the next decade while increasing spending on low-carbon energy.
"We're pivoting from being an international oil company to an integrated energy company," Bernard Looney, the company's chief executive, said Tuesday.
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Other European majors including Shell and Total have set similar net-zero emissions goals, though they've yet to provide many details. US majors Exxon and Chevron, under less pressure from investors and local policies, have laid out less-ambitious plans to limit emissions.
One measure of a company's commitment to a cleaner future is investment in clean energy. Here's how the top companies stack up, according to data from the research firm Wood Mackenzie (Wood Mac).
Oil majors invested about $9 billion in clean energy deals since 2016
Wood Mac tracks M&A and VC deals in clean energy for the seven so-called oil majors — Shell, Total, BP, Chevron, Exxon, Eni, and Equinor.
Since 2016, the majors spent just over $9 billion on clean energy, Wood Mac said, not including internal R&D. Exxon was not included in the data provided to Business Insider because it has done little M&A in clean energy, Wood Mac said.
That is not a lot of money. Last year alone, Shell had a capital expenditure budget almost three times that, while the budgets of BP, Chevron, and Total were about twice as large.
Total and Shell, which are way out in front, have inked big clean-energy deals in the last four years. In 2019, for example, Shell acquired the energy-storage giant Sonnen through its new energies division.
"Shell is really at the forefront of the transition together with Total," Valentina Kretzschmar, an analyst at Wood Mac, said. "They have invested across the electricity value chain, and they are really focusing on the power sector and the electricity side of the business."
While falling near the bottom, US giant Chevron is among the most active investors in carbon capture technologies. Based in San Ramon, California, the firm says it has invested more than $1 billion in carbon capture, utilization, and storage.
"We believe our industry is well-positioned to help commercialize carbon capture, utilization, and storage technologies that will be essential for the energy transition," Barbara Burger, president of the company's VC arm, Chevron Technology Ventures, said earlier this year. "We have leveraged venture capital and trial capabilities, our experience, and our operations to support the development of low carbon solutions."
Exxon, which was not on the list due to limited clean-energy M&A, told Business Insider earlier this summer that it has spent more than $10 billion in the last decade "to develop and deploy higher-efficiency and lower-emission energy solutions across its operations."
A surge in clean-energy spending to come
Clean energy spending among majors is set to surge. On Tuesday, BP said it would increase its yearly investment in low-carbon energy 10-fold by 2030. Meanwhile, Norway's Equinor is expected to spend $6.5 billion in the next three years to build out its offshore wind portfolio, according to the consulting firm Rystad Energy.
This is all despite the fact that the coronavirus pandemic caused oil markets to collapse earlier this year. Today, the cost of a barrel of Brent crude, the international benchmark, is still down about 30% since the start of the year.
"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," Gero Farruggio, Rystad Energy's renewables product manager, said in June. "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."