Energy majors hold back on renewables, focus more on fossil fuels: research report

ENERGY giants – such as BP, Shell, TotalEnergies and Equinor – are holding back on renewable energy commitments and focusing more on fossil fuels to secure higher short-term returns, said a report by research outfit BMI.

“The primary drivers behind these strategic pivots include rising costs and supply chain disruptions of renewable projects, as well as the need to enhance energy security,” said BMI in the Feb 24 report.

Many energy majors had set ambitious goals to invest in renewable energy and achieve net-zero emissions, but are now weakening or dropping targets, BMI noted.

For instance, BP had aimed to cut oil and gas output by 40 per cent by 2030, but was last year reported to have abandoned the target. Equinor has halved its low-carbon investment from US$10 billion to US$5 billion. Shell has weakened its 2030 carbon-reduction targets and is investing in an oil and gas project in Nigeria.

The shift comes even as profit margins in the oil and gas business are expected to narrow, said BMI, which is bearish on oil and gas prices this year.