FEATURE: Offshore Technology Focus – Green vs black: is Statoil hedging its bets with heavy renewables investment?

Over the last few years Statoil has curbed or halted new investments in fossil fuel projects, notably dropping its assets in the Canadian Oil Sands. Meanwhile, the company has upped its stake in the renewable energy sector, specifically offshore wind power. What is behind Statoil’s new business strategy, and where could it lead?

“You should never waste a good crisis,” Statoil CEO Eldar Saetre said during a February press conference in London. “Statoil is emerging from the downturn as a stronger and much more competitive company.”

Saetre, who The Financial Times has described as the ‘reluctant chief executive’, was appointed CEO of Statoil in 2015, the year the oil price fell at its sharpest. To weather the downturn, Saetre embarked on a major cost-cutting exercise; he delayed major projects, reduced the company’s workforce, made efficiency improvements and increased debt.

In December 2016, Statoil offloaded its assets in the capital intensive Canadian Oil Sands. At the time, Bjørn Otto Sverdrup, a senior vice president in charge of sustainability at Statoil, said on Twitter that the move “bends our cost and emission curves… building resilience”.

Yet as the firm was cutting and halting its fossil fuel investments, it was also increasing its stake in the renewable energy sector.

After making its first wind power investment in 2011, in 2015 the company announced plans to build the world’s first floating wind farm, the Hywind pilot park project offshore Peterhead and Aberdeenshire, Scotland.


Statoil’s renewables spree

In February 2016, the company established the $200m Statoil Energy Ventures fund to “complement its oil and gas portfolio with profitable renewable energy and low-carbon solutions,” according to the firm. So far the fund has invested in start-ups such as solar power company Oxford PV  and electric vehicle charging company ChargePoint.

Statoil also acquired a 50% stake in the Arkona offshore wind farm in Germany in April the same year. The acquisition increased the total energy production capacity of the offshore wind projects in its portfolio by around 50%.

The company now has six wind power projects, either operating or in the pipeline. Most recently, in December 2016, it won a lease to explore the potential development of an offshore wind farm for New York City and Long Island.

Shell, BP, Total and others have also followed this trend to invest in renewable energy. Last year seven major oil and gas firms, including Statoil and Saudi Arabia’s Saudi Aramco, said they would join forces to create an investment fund for renewables.

Even so, of all the companies, Statoil has used the downturn as an opportunity to diversify its business away from the volatility of the oil and gas sector.

Is that what Saetre meant when he said ‘never waste a good crisis’?

Read the full feature here