By AFP - Agence France Presse
Oil giants TotalEnergies and Equinor reduce low-carbon investments
Paris - French oil and gas giant TotalEnergies said Wednesday it would reduce its investments in low-carbon energy, while Norway's Equinor scaled back its ambitions for renewables as the companies reported sharp falls in annual profits.
The main fossil fuel companies saw their profits fall as oil prices plummeted due to concerns about demand, after rising in the wake of Russia's invasion of Ukraine in 2022.
Despite pressure from climate campaigners for the industry to phase out fossil fuels, companies are reducing investment in renewables and increasing their more profitable oil and gas production.
TotalEnergies said on Wednesday that it would reduce its investments in low-carbon energy, mainly for electricity, by $500 million - from $5 billion to $4.5 billion.
The French oil and gas major reported a net profit of $15.8 billion for 2024 - still considerable, but 26% lower than the previous year. This figure was around $1 billion lower than predicted by analysts consulted by Bloomberg and financial data company FactSet.
This followed two years of record profits, which reached $21.4 billion in 2023.
“The oil and gas scenario was less favorable (in 2024),” TotalEnergies chief executive Patrick Poyanne told reporters.
“In the end, it will still be the third highest results in (the company's) history,” he added.
Equinor said its net profit fell by a quarter to $8.8 billion in 2024.
The Norwegian company said it now plans renewable capacity of between 10 and 12 gigawatts in 2030, down from the previous forecast of 12 to 16 GW.
The company added that its ambition to allocate 50% of capital investment to renewable and low-carbon projects “is retired”.
Emissions from fossil fuels continue to rise, despite a global commitment to move the world away from coal, oil and gas.
Under the Paris Agreement on climate change, the world has agreed to try to keep warming to the safer limit of 1.5ºC.
- 'Colossal profits'
Equinor also announced plans to increase oil and gas production by more than 10% between 2024 and 2027. It has increased its expected production for 2030 from two million barrels a day to 2.2 million.
“We are taking firm steps to adapt to the market as we see it,” chief executive Anders Opedal told Norwegian newspaper Dagens Naeringsliv.
“It is the market that is changing. My job is to create shareholder value in a constantly evolving market,” he said.
Climate campaigners criticized the company's announcement.
“Equinor continues to make colossal profits by accelerating climate change, which causes more extreme weather events, melting ice and human deaths,” said Frode Pleym, director of Greenpeace Norway.
“When more than 99% of its energy production continues to be based on fossil fuels and the company further reduces its renewable ambitions, it is impossible to take its ecological commitments seriously,” he said.
The NGO called on the Norwegian government, which holds a 67% stake in Equinor, to respond to the company's decision to scale back its renewable energy plans.
- Debate on oil production
Equinor and TotalEnergies are not alone.
British oil majors BP and Shell have also slashed several climate targets to focus more on oil and gas in order to boost profits, drawing criticism from environmental activists.
Italy's Enel reduced its renewable energy ambitions by around five billion euros for the period 2024-2026 in a new strategic plan published in 2023.
US majors ExxonMobil and Chevron continue to focus on oil and gas production.
The outlook for global oil production varies.
The International Energy Agency, which advises developed countries, predicts that oil production will peak at the end of the decade.
The OPEC oil cartel, led by the Saudis, expects production to continue growing until at least 2050.
burs-lth/cw
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