OPINION: Oil majors and oilfield services companies are venturing into floating wind and carbon capture and storage (CCS), bringing their heft and offshore expertise.
You can see them joining the RenewableUK lobby group and the Floating Wind Joint Industry Project.
And Norway’s Equinor has pioneered the world’s largest floating wind project, Hywind Tampen. This will help to decarbonise some North Sea oil and gas operations.
Shell has teamed up with Spanish utility Iberdrola to develop large-scale floating wind projects off Scotland.
South Korean shipbuilding giant Samsung Heavy Industries is entering the wind market with its DNV-approved Tri-Star Float platform.
Aberdeen-based global contractor Wood Group now says only 35% of its work comes from the oil and gas sector.
Counting on carbon capture
But it’s not always smooth sailing for Big Oil in progressing complex decarbonisation projects.
Critics have seized upon news that Chevron has failed to meet its targets for a CCS project in Australia. This shows, argue the naysayers, that CCS is not the silver bullet that fossil fuel companies are banking on for decarbonisation.
The problems at Chevron’s Gorgon liquefied natural gas scheme certainly aren’t helpful for building confidence in CCS.
But the biggest threat to this technology may come not from technical hitches, but from high and uncertain costs at a time when wind and solar prices are still largely falling.
CCS is not a new technology, but as Gorgon shows, it can be tricky, especially where the geology is as complex as Western Australia's.
What CCS really needs is a global carbon price that would underwrite more development — and provide a boost for renewables.
CCS is important for LNG schemes, but also potentially for any real growth in a “blue” hydrogen sector built around natural gas.
The Paris climate change agreement is banking partly on CCS technology to curb global warming.
The oil and gas industry needs carbon capture to help keep many legacy assets in business.
While a global carbon price still looks a long way off, the European Union and China are widening regional emissions trading schemes.
But the difficulty in finding an agreed position even on coal burning illustrated divisions among policymakers at the G20 summit in Naples last weekend.
Yet companies are trying to unlock value in the energy transition.
Norway’s Aker Solutions has created two new spin-offs: Aker Carbon Capture and Aker Offshore Wind.
Saipem and Subsea 7 have also talked about the strong opportunities from the renewables sector.
So is this a bonding between green and black that will last, especially in a higher oil price environment? Many oil and gas companies have realised it is vital to develop both carbon and non-carbon business streams.
Some utilities are pleased to welcome the engineering expertise, financial firepower and traditional closeness to governments of Big Oil.
But there are undoubtedly tensions from this brash and burly newcomer barging into the world of green power.
Asset prices have been driven up, most notably when BP bought offshore wind leases.
And there are potential conflicts around blue hydrogen and CCS, versus a full-blown electric economy.
But so far, the marriage is off to a good, if slightly nervy, start.
(This is an Upstream opinion article.)