In March, stay-at-home orders to fight the spread of COVID-19 cut into oil demand in a big way. And the pandemic has only continued to do so. Demand continues to crash because folks are still staying home. And at the same time, solar and wind energy prices continue to undercut their fossil fuel counterparts. Is this oil's death blow? Not quite. But it is a big wake-up call for oil companies. Some are responding by cutting costs and slashing investments in new fossil fuel exploration and production projects. Others see the big-picture transition away from fossil fuels and toward renewables. Those that do are starting to pour money into clean energy. And a lot of it. Let's look at all the supermajors and see which companies are doing what. Pumping Billions Into Renewables Both Chevron Corporation (NYSE: CVX) and Exxon Mobil (NYSE: XOM) don't seem to have much interest in renewable energy or other clean technologies. Neither company has a plan to move in that direction. However, Exxon is focused on reducing greenhouse gases. To that end, it is investing in carbon capture and storage technology and advancing biofuels. But that is where that disinterest ends. The rest of the supermajors have plans to invest in renewable technologies. In 2014, Italian oil and gas giant Eni SpA (NYSE: E) opened the world's first biorefinery. The company converted it from an oil and gas refinery. It now produces green jet fuel, naphtha and diesel. Eni is also focused on growing its onshore and offshore wind farms. It wants to reach 1 gigawatt (GW) of renewable capacity by 2021 and 5 GW by 2025. Total SE (NYSE: TOT) is the French oil and gas supermajor. It has integrated oil and gas operations worldwide. Total has made several strategic investments in renewables. Most notably, it spent $1.4 billion acquiring 60% ownership of SunPower Corporation (Nasdaq: SPWR). It plans to be a global leader in solar power. It has 1.6 GW of solar capacity already and plans to bump that to 5 GW by 2025. Total is also interested in electric vehicles. In 2016, it spent $1.1 billion on Saft, a French battery manufacturer. Finally, it spent $224 million on Lampiris, a green power utility in Belgium. It paid $1.7 billion for a 74% stake in the French utility Direct Énergie. That purchase makes Total one of the biggest utilities in France. Repsol SA (OTC: REPYY) is a large Spanish oil major that is also moving into renewables. Last year, it set a net-zero emissions target date of 2050 and was the first major oil company to do so. |
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