Oil & gas heavyweights invest just 3 per cent of budget in renewables

Oil and gas majors are pumping $6.6 billion (£5bn) a year into renewable energy, representing just 3 per cent of their budgets, according to new research from CMS.

Wind and solar power account for 96 per cent of all investment in renewables by the sample companies. Picture: Peter Byrne

As pressure mounts to address the climate crisis, the law firm found that 15 of the world’s largest oil and gas companies invested a combined £5bn into renewables, carbon capture and carbon storage in 2018, the most recent year for which figures are available.

The report estimates that the sample firms – representing half of worldwide production – will up their annual investment into the energy transition to $10bn by 2030 if existing policies continue, totalling $100bn over the period.

However, if the cohort were to significantly ramp up its commitment to renewables, this could rise to 10 per cent of annual spend, totalling $209bn by 2030.

CMS claimed the speed of the transition depends on the declining costs of renewables, investor and customer pressure, government regulation and a new risk strategy, given recent oil price volatility.

Wind and solar power account for 96 per cent of all investment in renewables by the sample companies, with ConocoPhillips the only group which had failed to invest in either.

Munir Hassan, head of CMS Energy Group, said: “Oil and gas majors understand that they need to transform their business models as part of a global shift towards a more sustainable future. Both of our future energy scenarios assume a significant change in approach over the next decade.

“Energy transition now dominates conversations at board level. Whether it is de-carbonising their own operations or investing in alternative energy, the transition will happen. It will take time, but time is something that is in short supply.”