The Majors’ Accelerating Tilt Towards New Energy

The Majors’ Accelerating Tilt Towards New Energy

Big Oil is determined to show it's part of the solution for climate change. That much is clear from the rapid acceleration of investment in new energy. I asked Tom Ellacott and Greig Aitken of our Corporate Research team how they see the Majors' strategic positioning evolving. How much has spend ramped up? It's doubled since 2019/20. Two years ago, the Euro Majors were planning to spend an average of US$2 billion a year on new energy, 10% of total investment. An intense period of business development has strengthened the opportunity set. Budgets for all of the Majors are now aimed at an average of US$4 billion a year, almost 25% of total investment – though timescales vary across the group. Repsol's target of 35% out to 2025 is the most aggressive. Another big change from two years ago is that the US Majors have entered the fray, as we predicted. We expect Chevron CVX and ExxonMobil XOM to follow the upward trend. Their plan to allocate 10% of spend to low-carbon opportunities is only an opening salvo. What are the Majors investing in? Mostly renewables, the immediate growth opportunity as the world electrifies. Solar, onshore wind and offshore wind