Plan B?

solar panels

‘As the world changes, all energies change with it’.

This was the heading of an Engie news article, written to explain their rebranding from GDF to Engie.  In order to better reflect a changing market and encompass all forms of energy they took the decision to make their own transition.  With a rising sun in the logo they have embraced change and look to symbolize a new dawn.

In 2015, around the same time as the rebrand, Engie acquired a 95% stake in Solairedirect , a global leader in competitive solar, present in over 15 countries worldwide.   As a result, ENGIE’s position in the solar sector increased and it emphasised their new commitment to alternative energy.

So, do all oil and gas companies have a Plan B?  Are they now beginning to look at fledgling industries as an alternative to oil and gas?  Some evidence would suggest so and it would appear that ENGIE aren’t alone in their realignment as other oil and gas majors begin to take a similar approach.

EREN RE is a company dedicated to natural resource efficiency. It was founded in 2012 and offers reliable solutions to its clients and partners. In September last year, Total signed a deal which will finance development of an EREN activity stream in the coming years.

Total EREN, as they are now known, act as an Independent Power Producer (IPP), who develop, own and operate wind and solar energy power plants over the long-term.  Total EREN is positioned in countries where renewable energy constitutes an economically viable response to growing energy needs. Total acquired an interest of 23% in EREN RE with the option to take control in 5 years’ time.  This allows them to enter the wind power generation segment and provides a prime example of an oil major changing their company’s focus for the future.

Four years ago, the oil price was around $100 per barrel and companies weren’t noticeably looking at alternatives to oil and gas.  In fact, BP dropped green energy projects worth billions to focus on fossil fuels. In 2015, a large proportion of their $20bn spend on projects was in fossil fuels and this was undoubtedly due to the profitable position of the industry at that time. Four years down the line and BP’s focus appears to have changed.

It was recently reported that they are now planning to invest more in renewables. Chief executive, Bob Dudley said the industry was in a period of change while Deputy chief executive, Lamar McKay agreed, claiming ‘Our industry is changing faster than any of us can remember’.  Despite BP enjoying its most successful year for exploration since 2004, and having six new projects lined up for 2018, they have committed to acquiring more green energy firms.

Diversification is something that should be encouraged and the new opportunities that present themselves should be embraced by all.  The skills and talent in the area are a good fit for the emerging opportunities so it’s clear to see that, with drilling projections for 2018 looking promising and an increase in exploration licenses granted, the industry is undoubtedly in a better position than it was a couple of years ago energised by a whole host of new prospects.