Offshore wind power is getting investments from Shell, Statoil and Eni.
Royal Dutch Shell Plc, Statoil ASA and Eni SpA are three oil companies with drilling rigs in the North Sea, who have inexplicably decided to dive into the offshore wind farm industry. The companies are making multi-billion dollar investments into wind energy, and are beginning to win in auctions against other companies like Dong Energy A/S and Vattenfall AB for contracts to anchor massive turbines in the seabed.
While the move might seem surprising to many, it’s actually a smart investment. Oil companies have spent decades trying to extract oil from the North Sea, and with some of those reserves becoming depleted, their oil rig profits are beginning to dwindle. Couple that with reliable income from wind power plants that is backed by government subsidies, and you have a dependable revenue stream. It also makes sense to get a foot into the renewable energy market that so far has been in direct competition with the oil companies.
“It is certainly an area of interest for us because there are obvious synergies with the traditional oil and gas business,” said Luca Cosentino, vice president of energy solution at Italian oil producer Eni. “As the oil and gas industry we know, we cannot get stuck where we are and wait for someone else to take this leap.”
Map showing the North Sea
It is somewhat ironic that the winds sweeping across the North Sea, which previously were a bane for oil workers, will now be benefiting energy production instead. Between 2000 and 2017, wind projects in the North Sea will have investments totaling SGD 138 million, which is a huge amount. A decade ago, that number was only a fraction of what it is today.
Indeed, beyond dwindling supplies, oil companies may soon be facing dwindling demand as well. Projections made by Bloomberg New Energy Finance predict that by 2040, demands will drop by as much as 13 million barrels of crude oil. This is largely due to electric cars and renewable energy continuing to grow. 13 million barrels is a lot of crude oil; an amount equatable to the entire production of Saudi Arabia.
source: Bloomberg
