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Redburn argue in a research note. The French firm is focusing mainly on solar.
“BP’s challenge lies in the building up of its On September 25 it announced a partnership
skill set in renewable energy solutions and a with Spanish developer Ignis to build 3.3 GW
competitive advantage in its chosen areas that of solar capacity near Madrid and Andalusia.
allows investors to believe they can deliver Those projects are scheduled to come on stream
attractive financial returns from the capital allo- between 2022 and 2025. Total has also invested
cated,” Aviva’s Baig says. billions in power generation in general in recent
Under different circumstances, BP could years.
acquire a major renewables developer with While most of Europe’s major oil and gas
existing capacity and with projects already in companies have committed to diversification
the pipeline. But the company is saddled with into clean energy, their US counterparts have
nearly $41bn in net debt, making such an option remained staunchly devoted to hydrocarbon
unfeasible at this stage. production. But this strategy bears significant
This dilemma highlights the difficulties oil risks as well.
majors face in trying to build up their clean As countries across the world ratchet up
energy operations at a time when low oil prices efforts to decarbonise, the role of oil and gas
mean they are cash-strapped. Total is in a could greatly diminish, especially if carbon cap-
stronger position, having moved into renewables ture and storage (CCS) and other technologies to
sooner than its competitors. decarbonise oil and gas disappoint.
Week 39 30•September•2020 www. NEWSBASE .com P7
