By Valentina Kretzschmar, Wood Mackenzie Vice President, Corporate Research Offshore wind will play an important role in the Majors' plans to transform against the backdrop of the global energy transition. Some of the European Majors, such as Equinor and Shell, have been on that road for several years. However, other European major oil companies have recently adopted radical shifts in strategic direction that will transform them over the coming decades.

Research suggests that even if Big Oil stopped investing in renewables altogether, it would have a minor impact on growth — like for renewables player Orsted, formerly Danish Oil& Gas

Everyone loves low prices, but what the business community values most of all is predictability. The recent volatility in global oil markets — spearheaded by a fight to the death between Saudi Arabia and Russia — has sent the price of oil plunging to lows not seen in years. You might think that is good news for electrical energy generators who rely on fossil fuels, but that may not be true

They are caught between investors who want greener energy and those who simply want a strong return on their investments.

The plunging demand for oil wrought by the coronavirus pandemic combined with a savage price war has left the fossil fuel industry broken and in survival mode, according to analysts. It faces the gravest challenge in its 100-year history, they say, one that will permanently alter the industry. With some calling the scene a “hellscape”, the least lurid description is “unprecedented”.

New energy’s time has come. It is less than 4 years since the Paris Agreement set the long-term goal to limit the rise in global temperature to well below 2°C. Back then, the oil and gas industry had zero appetite to invest in decarbonization. Paris lit the fuse. I caught up with Valentina Kretzschmar, research director at Wood Mackenzie, to find out what’s happening.

Valentina Kretschmar, Wood Mackenzie Director of Corporate Research, asks whether the lack of diversity in oil and gas companies’ boardrooms is holding back the energy transition.

BP has declared it is looking to acquire more green energy firms, as the British oil giant pledged to set carbon targets for its operations. However, while the chief executive, Bob Dudley, said the industry was in a period of major change, he made clear that hydrocarbons would remain the core of BP’s business.

More than a fifth of investment by the largest oil and gas companies could be in wind and solar power in just over a decade, according to analysis of how global changes in energy will reshape the sector.