APOLOGETIC CHEERLEADER FOR FOSSIL FOOLS

Sustainable Investment Stumbles on Uncertain Pace of Energy Transition

By Tsvetana Paraskova - Jul 01, 2025

• A combination of rising costs, geopolitical shifts, and a backlash—particularly in the U.S.—has led to record outflows from ESG and green energy funds.
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• Despite record investments in clean energy, the world remains heavily reliant on oil, gas, and even coal.
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• While enthusiasm for sustainable investing has waned, especially amid underperformance in clean energy, long-term prospects remain strong.

The sustainable investment bubble has burst, once again this century.

This time it was the realization that the energy transition will be a slow gradual process of coal being replaced by natural gas and renewables gaining more share of electricity generation. This realization coincided with massive recent withdrawals from sustainable funds, due to the backlash against calls for blacklisting funding for fossil fuels, especially in Trump’s America.

The most recent decline in green energy investment isn’t the first one of the 21^st century. Early in the 2000s, just after the dotcom bubble burst and before the 2008 global financial crisis, there was a green investment rush on expectations that the energy transition would snowball into replacing fossil fuels soon, as Reuters Breakingviews contributor Edward Chancellor notes.

Investors were proven wrong in the 2000s, then in the 2010s, and now, in the middle of the 2020s, the sustainable investment bubble has burst once again. This followed frenzied investments in 2020 and 2021 and promises that the energy transition is so unstoppable that the world wouldn’t need investments in new oil and gas fields, as the International Energy Agency (IEA) famously said a few years ago.  

The dream of a fast energy transition has clashed time and again with the reality of the world’s energy needs. After the early 2020s rush to green energy, investors and policymakers realized that any transition will be gradual and the world will still need oil and gas – and even coal – for the foreseeable future.

The energy crisis of 2022 and the inflation spike that followed laid bare the enormous costs of going green and the slow pace of transitioning to more clean energy without taking into account the reality of what consumers really want – cheaper energy bills and reliable energy access.  

With the second term in office of U.S. President Donald Trump, the backlash against green investments only became stronger.

As a result of all these factors, investors pulled record amount of money out of sustainable funds, North American banks left net-zero alliances, and Europe’s biggest oil firms scaled back their renewable energy goals and investments and returned to their core business of aiming to pump more oil and gas to meet global energy demand with reliable and affordable energy.  

Moreover, policymakers and investors alike realized the price tag of the energy transition is huge, and no net-zero goals would be achievable at the current pace of annual investments in clean energy solutions.

Global investments in green energy solutions topped $2 trillion last year, for the first time ever, but the world needs to pour in $5.6 trillion each year into low-carbon energy to get on track for global net zero by 2050, in line with the Paris Agreement, BloombergNEF said in a report early this year.

Last year, green energy investments reached a record high globally, but the pace of growth has slowed from the 2021-2023 period, according to BNEF’s report Energy Transition Investment Trends 2025.

In the first quarter of 2025, geopolitical shifts and the ESG backlash led to global sustainable funds facing record outflows of $8.6 billion in Q1 2025, data by Morningstar showed.

The U.S. pullback continued for the 10th consecutive quarter, but more significant was the one in Europe, which has been the biggest sustainable funds market with consistent inflows into green investments. Europe saw net outflows in Q1, for the first time since Morningstar began tracking data in 2018.  

“This perceived rollback in international alignment on sustainability, alongside evolving regulatory requirements in Europe and ongoing performance concerns—especially in clean energy—has contributed to weakening demand for ESG products,” analysts at Morningstar Sustainalytics wrote.

The current pullback will not last forever—there will always be up and down cycles, and it’s clear now that clean energy will play a major role in global energy trends and supply. Yet, the latest ESG investment decline is a cautionary tale for those who get ahead of themselves and discard the world’s continued need for fossil fuels.

By Tsvetana Paraskova for Oilprice.com

 

EY Audit Breach Forces Shell to Amend U.S. Filings

By City A.M - Jul 03, 2025

Shell is to file amended regulatory filings after Big Four firm EY told the oil giant it broke audit rules after its lead partner overstayed their time.

Shareholders were informed on Wednesday that an unnamed partner at EY who led the 2023 and 2024 audits for the energy giant “had exceeded the period allowed under Securities and Exchange Commission (SEC) audit partner rotation rules”.

EY informed Shell on Tuesday that its US opinions on Shell’s previously issued audited consolidated financial statements and effectiveness of internal control over financial reporting “should no longer be relied upon”.

The firm assigned a different partner to perform the role of lead audit partner, who concluded that no changes to the previously issued financial statements for the applicable years are necessary.

EY also concluded that “the appropriate remediation” was for Shell to file an amended Form 20-F for the two years where it had breached rules to the SEC.

EY also advised the energy giant that the time limitations under the UK Financial Reporting Council (FRC)’s rules on rotation of partners had also been exceeded.

However, the group noted that no amended filings are required in the UK.

Commenting on the matter, a spokesperson from EY UK said it “deeply regrets this occurred and has remediated the matter.”

“There has been no change to the financial information previously prepared by Shell plc, for the applicable years, and EY UK is providing updated, unqualified, SEC audit opinions.”

“We are committed to the highest standards of audit quality and will continue to take any necessary steps to ensure these standards are upheld,” the spokesperson added.

Just last month KPMG UK and an audit partner were hit with sanctions over the audit of Carr’s after the partner was found to be placing reliance on the work of the other audit firm.

Last week the oil giant denied reports that it is engaged in talks to acquire its rival BP.

By City AM 

UK

Ofgem Unveils £24 Billion Grid Modernization Plan

By City A.M - Jul 01, 2025

• Ofgem has approved a £24bn investment to upgrade the UK’s energy infrastructure as part of its green transition, with over £15bn for gas systems and £8.9bn for the high-voltage electricity grid.
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• This investment is the initial phase of an £80bn program aimed at boosting the electricity network and protecting UK households from the volatility of international gas markets.
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• The program is expected to significantly increase the grid’s capacity through new power lines, substations, and technologies, allowing for 80 transmission projects to be completed within five years.
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The UK’s energy regulator has approved a £24bn investment to upgrade the UK’s energy infrastructure as a part of its green transition.

The Office of Gas and Electricity Markets (Ofgem) move comes as the government renews its push for cleaner energy, despite backlash around the impact on prices.

Over £15bn is set to be deployed into the UK’s gas transmissions and distribution systems to ensure a “safe and secure” supply of gas to households and businesses.

Meanwhile, £8.9bn will be spent on expanding Britain’s high-voltage electricity grid in its largest update since the 1960s. The regulator said another £1.3bn injection is set for the grid.

City AM revealed earlier this month the government had quietly admitted using low-carbon technologies, which are essential to the rapid drive to net zero, were more expensive than when fossil fuels are used as an energy source.

The fresh investment is the first part in an £80bn programme which aims to boost the electricity network across the country. The plans also seek to protect UK households from the volatility of international gas markets that have drastically impacted energy bills in recent years.

Ofgem eying UK’s energy independence

UK energy prices have soared amid rising geopolitical uncertainty. Russia’s invasion of Ukraine in 2022 spiked prices to record highs and pushed the average household energy bill to nearly £4,000 a year, ahead of government subsidies, subsequently triggering the cost-of-living crisis.

The initial spike in oil prices as conflict intensified in the Middle East also led to heightened concerns energy prices could be hit.

Ofgem said investment in the electric grid will rise to around four times the current spending levels, allowing for 80 transmission projects and all associated works to be completed within five years.

The programme is hoped to significantly increase the grid’s capacity through the construction of new power lines, substations, and other technologies.

The government doubled down on green ambitions on Monday as the City minister reaffirmed plans to drive sustainable finance in the Treasury’s upcoming financial services strategy.

By City AM 

 

Why BP Became Target of Biggest Potential Oil Deal in Decades

By Tsvetana Paraskova - Jul 01, 2025

• Market chatter about a potential Shell-BP merger has intensified, fueled by BP’s weak performance, strategic flip-flops, and investor dissatisfaction.
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• Shell formally ruled out a bid for BP in the short term under UK takeover rules.
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• Any acquisition would face major regulatory hurdles across multiple countries.

Reports and rumors have intensified this year that BP is in the crosshairs of rivals, especially Shell, for a potential takeover that would be the largest deal in the oil industry since the Exxon and Mobil merger in 1999.

Five years of U-turns in strategy and the abrupt departure of the architect of the ‘greener’ BP, Bernard Looney, have left investors unconvinced in the direction the UK supermajor is taking and whether it could – at some point, finally – convince shareholders and the market that it is a stock worth holding.

The latest speculation, from a few days ago, again placed UK-based rival Shell as a potential buyer of BP. Shell dismissed the latest market talk with a statement, but didn’t close the door on a potential bid down the line, or “if there has been a material change of circumstances.”

Shell, and any other suitor for that matter, would need to carefully consider the idea of a takeover because of the enormity of a deal, the debt level and ratio at BP that are higher than these of its peers, and likely stumbling blocks in regulatory approvals in numerous jurisdictions, including at home in the UK.

How BP Became The Weakest Link

A BP-Shell tie-up has been the talk of the market for years. BP’s stock has underperformed those of its peers for years, and the two strategy resets in five years this decade alone haven’t helped investors believe that either of the two strategy shifts could bring significant value.

First it was former CEO Looney who, in 2020, steered BP into turning into an integrated energy company from an international oil major by reducing its oil and gas production and boosting investments in low-carbon energy solutions. This “performing while transforming” strategy failed to convince investors as returns from renewables were meager, at best, and the stock market did not appreciate reduction of the most profitable business, oil and gas, at the expense of costly and lower-value-creating renewables.

Related: Saudi Aramco Set to Raise Oil Prices to Asia Amid Strong Demand

Then came 2022 and the energy crisis, which upended all plans and strategies. All majors started emphasizing the need for affordable, reliable energy in a move to continue producing more oil and gas. BP’s then CEO Looney talked about solving the energy trilemma – affordability, security, and sustainability, until September 2023, when he abruptly departed over previously undisclosed relationships at the workplace.

Then, CFO Murray Auchincloss took over in the interim before being officially elected chief executive officer in 2024.

Strategy Reset

Early this year, Auchincloss announced a fundamental strategy reset to return to the core business of pumping more oil and gas and slashing investments in renewables.

The reset was likely also the result of activist hedge fund Elliott buying nearly 5% in the UK-based supermajor early this year. Elliott, known for aggressively demanding changes, big and fast, at any company in which it is building stakes, pressured BP to reward shareholders by reducing debt.

Hopes at BP that the strategy reset would now reverse the fortunes for the BP stock were quickly dashed.

In a very unfortunate development for BP, any positive short-lived share performance from the strategy reset was obliterated within a month by the tariff and trade wars, which crashed the price of Brent Crude oil to the low $60s per barrel in April and May.

The prices were already lower in the first quarter of 2025 compared to a year earlier—and BP’s financials showed it.

After BP reported the weakest set of Q1 results among Big Oil and reduced by $1 billion its quarterly share buyback program as cash flow declined and net debt rose, speculation of a Shell-BP megadeal intensified in April.

What’s Next?

The speculation resurfaced in the last week of June, after The Wall Street Journal reported that Shell is in early-stage discussions to acquire its British rival.

A day later, Shell said it hasn’t actively considered an offer for BP and has no intention of making such a bid.

“In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer,” Shell said in a statement, addressing the report.

Under UK market rules, Shell confirmed it has no intention of making an offer for BP, and by confirming this, Shell will be bound by the restrictions in the rules not to make an offer for BP in the next six months.

The supermajor, however, left the door slightly open to an offer in the future if a third party announces a firm intention to make an offer for BP, or “if there has been a material change of circumstances.”

Shell and other majors, including the U.S. giants, are not being ruled out as BP suitors in the future.

“The fact rumours keep circulating might suggest there is some truth in the matter, be it Shell or someone else looking to buy the UK oil and gas producer,” Dan Coatsworth, an investment analyst at AJ Bell, told Yahoo Finance.

Yet, any bid for BP would need to clear a lot of regulatory hurdles in various jurisdictions, and the bidder will have to weigh the potential benefits of synergies against BP’s debt and potential asset sales to win regulatory approvals.

By Tsvetana Paraskova for Oilprice.com

Libya Fixes Leak on Crude Oil Pipeline Linked to Top Refinery

By Tsvetana Paraskova - Jul 03, 2025

Arabian Gulf Oil Company (AGOCO), wholly owned by the National Oil Corporation of Libya, has completed repairs on a crude oil pipeline where a leak was detected at the end of May.

AGOCO completed the repairs on the Hamada-Zawiya crude oil pipeline, the company said on Thursday, as carried by Reuters.

Zawiya, which lies 25 miles west of Tripoli, is home to the largest operational refinery in the country with a capacity to process 120,000 barrels per day (bpd) of crude oil. The Zawiya refinery is connected to the 300,000-bpd Sharara oilfield, Libya’s largest.

Following the leak on the Hamada-Zawiya pipeline, AGOCO halted the flow of crude.

Libya has been struggling with old oil and gas infrastructure as international majors shunned the country for more than a decade since the civil war began after the toppling of Muammar Gaddafi in 2011.

However, foreign majors are willing to go back if Libya’s first exploration bid round in 18 years is anything to go by.

Supermajors ExxonMobil, Chevron, TotalEnergies, and Eni are competing in Libya’s first oil bid round since 2007, ‏Masoud Suleman, chairman of Libya’s National Oil Corporation (NOC), told Bloomberg in an interview published on Wednesday.

The majors are among the 37 international companies that have expressed interest in Libyan acreage for oil and gas exploration, NOC’s Suleman told Bloomberg.

“Almost all well-known international companies” are competing in the tender, the executive added.

Libya is offering a total of 22 blocks for exploration and development—11 offshore and 11 onshore blocks, including areas with undeveloped discoveries.

Libya holds an estimated 91 billion barrels of oil equivalent in undiscovered oil and gas resources, NOC says.

The country’s crude oil production is currently around 1.3-1.4 million bpd.

The national corporation looks to boost oil production to 2 million bpd within the next three years, “contingent on sufficient funding.”

By Tsvetana Paraskova for Oilprice.com

 

Sierra Leone Stakes Next Oil Frontier Claim

By Irina Slav - Jun 30, 2025

• Sierra Leone this month concluded a round of seismic research.
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• Sierra Leone is planning a new licensing round later this year.
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• Nestled between Ivory Coast and Guinea, Sierra Leone has estimated hydrocarbon reserves of some 30 billion recoverable barrels of oil equivalent.
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African countries have recently started making more and more headlines with their plans to develop local oil and gas reserves despite strong opposition from foreign environmentalist organisations and international lenders. The latest to join the oil and gas club is Sierra Leone. And it has big plans for its hydrocarbons.

The small Western African state earlier this month concluded a round of seismic research that it now hopes would lure international oil majors in, after several discoveries that failed to produce commercial volumes of hydrocarbons. U.S. Anadarko and Russia’s Lukoil were exploring in the country’s waters but did not make any major find—although Anadarko struck potentially commercial oil at several offshore sites about a decade ago.

Despite a tough start, hopes remain high, and Sierra Leone is planning a new licensing round later this year based on the results of the new survey. “The reprocessing of that data is happening now with our multi-client partners, TGS, and we are hoping to get something to push to the market in October,” said the head of the country’s Petroleum Directorate, as quoted by Reuters, last week. Foday Mansaray added that several oil majors had bought the new data, including Shell, Hess Corp., Murphy Oil, and Brazil’s Petrobras.

Nestled between Ivory Coast and Guinea, Sierra Leone has estimated hydrocarbon reserves of some 30 billion recoverable barrels of oil equivalent. Of this, an estimated 3 billion barrels lie in a single discovery made by Anadarko over 10 years ago: the Vega prospect. The prospect’s development has stalled since its discovery, however, as the company concluded, based on early exploration, that it was not commercially viable. The same has happened to Anadarko’s three other discoveries and Lukoil’s Savannah discovery.

It wasn’t just that early exploration data. In 2014, Sierra Leone suffered an outbreak of Ebola, which interfered with its foreign investment plans, to put it mildly, and then the net-zero narrative started gathering pace, discouraging investors from betting on oil and gas. This only serves to highlight the change in sentiment over the past decade—and why oil and gas are so back.

In its latest issue of the Statistical Review of World Energy, the Energy Institute reported that demand for oil and gas globally had increased for yet another year in 2024. The increase was modest, at 1% but still an increase, despite forecasts of peak demand for hydrocarbons. This increase was the result of a general rise in energy demand—which prompted a boost in oil, gas, and coal consumption.

“Electrification is accelerating, particularly across developing economies where access to modern energy is expanding rapidly. However, the pace of renewable deployment continues to be outstripped by overall demand growth, 60% of which was met by fossil fuels,” the president of the Energy Institute, Andy Brown, said at the release of the data.

So, if the world is consuming ever more energy and wind and solar cannot meet it, then the world will continue needing oil and gas in still-growing volumes—and new sources of supply. This is why Sierra Leone has these high hopes and is investing in seismic surveys. Because legacy production regions are not going to produce forever. Petrobras is an example. The company recently said it has plans for international expansion with a focus on Africa. The reason: natural depletion at some of its fields at home.

Petrobras is not alone in the hunt for new discoveries that have revived interest in African exploration. Italy’s Eni recently acquired four new offshore blocks in Sierra Leone’s neighbour, Ivory Coast, as part of a large-scale project that is supposed to be the first net-zero offshore oil development ever. TotalEnergies earlier in the year received an offshore exploration license for an offshore block in Sao Tome and Principe – an island off the western coast of Africa close to OPEC member Equatorial Guinea. Liberia has also joined the ranks of prospective future oil producers in Africa with a licensing round for as many as 29 blocks earlier this year.

Given its proximity to the Ivory Coast and Senegal, and the similar geology, Sierra Leone has good reason for its energy hopes. But it’s not just clinging to these hopes. The authorities in the West African state have cut red tape in order to facilitate foreign energy investment. “From letter of intent to license, our process will not exceed 85 days. Our investment terms are very simple,” the Petroleum Directorate’s Mansaray said earlier this year.

In this, Sierra Leone is joining a trend across the continent. African governments are turning their backs on transition promises with little substance and instead turning to exploiting their countries’ natural resources. As one now former Big Oil top executive said a few years ago, as long as there is demand for oil and gas, there will be supply.

By Irina Slav for Oilprice.com

 

TotalEnergies Sells 50% Stake in Portuguese Renewables Portfolio

By Editorial Dept - Jul 03, 2025 -  Oilprice.com

TotalEnergies has sold a 50% stake in a 604-megawatt portfolio of renewable energy assets in Portugal to a Japanese consortium for €178.5 million, the company announced Wednesday. The deal, part of TotalEnergies’ capital rotation strategy, allows the French energy giant to optimize its investments in its growing electricity division while maintaining operational control.

The consortium includes MM Capital Partners 2 Co., Ltd., Daiwa Energy & Infrastructure Co., Ltd., and Mizuho Leasing Co., Ltd. The assets—comprising wind, solar, and hydroelectric projects—have an average age of 16 years and benefit from regulated tariffs that will eventually transition to market-based pricing. TotalEnergies will continue to manage the assets and has secured the rights to purchase their output once the current tariffs expire.

“We are pleased with this partnership in Portugal, a country where TotalEnergies intends to continue its development in renewables,” said Olivier Jouny, the company’s Senior Vice President for Renewables. “This transaction allows us to optimize our capital allocation in our integrated electricity activities and contribute to improving the sector's profitability.”

The sale aligns with TotalEnergies’ broader strategy to develop, operate, and partially divest renewable assets to recycle capital for new projects—a model that has gained traction among major energy companies shifting portfolios toward low-carbon assets. The company has pursued similar partnerships globally as it scales its renewable footprint while maintaining financial flexibility.

Portugal’s renewable energy sector has been attracting significant foreign investment in recent years, supported by favorable regulations and ambitious national targets. In 2023, renewables accounted for over 60% of Portugal’s electricity production, according to the International Energy Agency, with the country aiming to produce 80% of its power from renewables by 2030.

This transaction echoes similar moves by TotalEnergies across Europe and Asia as the company navigates a competitive energy transition landscape. For instance, TotalEnergies has recently expanded its presence in offshore wind projects and solar ventures in markets including Spain and Japan, as the company continues to shift away from its legacy oil and gas operations.

The deal also highlights growing Japanese interest in international renewable assets. Japanese investors, facing limited domestic opportunities, have increasingly looked to Europe for stable, regulated energy projects. This trend reflects broader shifts in global capital flows toward sustainable investments.

TotalEnergies’ active portfolio management and global renewables push come amid intensifying competition among oil majors pivoting to clean energy. Similar strategies have been observed in the recent wave of European energy M&A activity, as companies seek to balance growth, capital discipline, and energy transition commitments.

Portugal itself remains a key battleground for renewable energy expansion, offering attractive conditions for both operators and investors amid Europe’s accelerating decarbonization efforts.

For TotalEnergies, the Portuguese deal exemplifies a disciplined, partnership-driven approach to scaling renewables, positioning the company to remain competitive as the energy transition reshapes global power markets.