Oil firms turn energy to wind projects

Oil firms turn energy to wind projects

Royal Dutch Shell, Statoil and Eni enter offshore farms

London — Big oil is starting to challenge the biggest utilities in the race to erect wind turbines at sea.

Royal Dutch Shell, Statoil and Eni are moving into multi-billion dollar multi-
billion-dollar offshore wind farms in the North Sea and beyond. They are starting to score victories against leading power suppliers including Dong Energy and Vattenfall in auctions for power-purchase contracts, which have developed a specialty in anchoring huge turbines on the seabed.

As the oil and gas industry we know we cannot get stuck where we are and wait for someone else to take this leap

The oil firms have many reasons to move into the industry. They have spent decades building oil projects offshore and that business is winding down in some areas where older fields have drained. Returns from wind farms are predictable and underpinned by state-regulated electricity prices. And fossil fuel executives want to get a piece of the clean-energy business as forecasts emerge that renewables will eat into their market.

“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, which is working with General Electric on renewables.

“As the oil and gas industry we know we cannot get stuck where we are and wait for someone else to take this leap.”

Even as oil production declined in the North Sea over the past 15 years, economic activity has been buoyed by offshore windmills. The notorious winds that menaced generations of roughnecks working on oil platforms have become a boon for a new era of workers asked to install and maintain turbines anchored deep into the seabed.

About $99bn will be invested in North Sea wind projects from 2000 to 2017, according to Bloomberg New Energy Finance. A decade ago, the industry had projects only a fraction of that size.

While crude still supplies almost a third of the world’s energy, oil executives are adjusting to demands for cleaner fuels. Even so, emerging fossil-fuel alternatives including wind and solar power are starting to limit growth in oil demand.

Those technologies and electric cars may displace as much as 13-million barrels of oil a day from global demand by 2040, more than is currently produced by Saudi Arabia, according
to Bloomberg New Energy Finance.

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