How oil majors bought into green energy

  • Date: 15-Jul-2020
  • Source: Financial Times
  • Sector:Oil & Gas
  • Country:GCC
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How oil majors bought into green energy

This year will be remembered as the point when the long-anticipated energy transition to a low-carbon future moved unequivocally from being a topic of debate to a shift of substance.

This transition away from fossil fuels will still take longer than many would wish “” but the pace of change will outstrip the current conventional forecasts.

Covid-19 is just one factor in what is a more complex story. The real driver has been a judgment made on the part of the energy business “” in particular European-based oil and gas companies such as BP, Shell, Equinor and Total “” that for basic commercial reasons they need to be on the green side of the future. This mirrors a similar realisation among energy-consuming companies in many other industrial sectors.

Resisting the pathway towards renewables has been recognised as both futile and bad business. The new thinking has come to a head now because the Opec cartel has lost its ability to control oil prices, thanks to the emergence of a sustained surplus of potential supply over demand.

Both oil and gas prices have been in decline since 2014. The recession that has followed the spread of Covid-19 has pushed prices down further this year. The result