The world’s largest oil companies are still investing very little in clean energy despite commitments to transition away from fossil fuels, according to Aurora Energy Research.
The firm analysed capital expenditure by oil majors between 2010 and the third quarter of 2018.
Outlining the findings at an event hosted by the ratings agency Moody’s, Aurora managing director John Fedderson said their investment is still “dominated” by spending on fossil fuel exploration and production.
French energy giant Total is at the head of the pack, with 4.3 per cent of its capital expenditure over the period going towards low-carbon technologies, although as Fedderson noted, carbon capture and storage (CCS) accounts for “a big part of it”.
BP came second, with 2.3 per cent of its investment allocated to clean energy. The company acquired a minority stake in the solar developer Lightsource in 2017 and last year bought EV charging company Chargemaster outright.
Anglo-Dutch company Shell invested just 1.3 per cent, placing it fourth. The director of its new energies division, Maarten Wetselaar, said earlier this year that the firm is planning to become the world’s largest power company by 2030. To achieve this, it plans to increase spending on the division to between $1 billion and $2 billion per year by 2020.
Last year, the company made a move into the retail market in the UK with the purchase of the challenger supplier First Utility, which was subsequently rebranded as Shell Energy.
Investment in low-carbon technologies as a share of capital expenditure
Source: Aurora Energy Research
Fedderson said it is possible to “infer what the big oil and gas companies are thinking about the future by their investment paths”. He said the figures suggest that the oil majors are not expecting worldwide emissions to fall to net zero by 2075 as will likely be necessary to limit global warming two degrees Celsius above pre-industrial levels.