Big Oil Looks To Capitalize On The $1 Trillion Offshore Wind Boom

By Tsvetana Paraskova - Aug 13, 2022, 

• European oil majors are scrambling to ramp up investment in renewable energy.
• Big Oil is increasingly eyeing opportunities in the booming offshore wind market.
• Oil companies can use their offshore expertise and deep pockets to carve out their own piece of the $1 trillion pie.

European oil majors are boosting investment in renewable energy sources as they aim to become net-zero energy companies by 2050 and slash carbon emissions. And there is one renewable energy sector where Big Oil has a lot to offer and a lot to gain—offshore wind.   Oil and gas majors can use their offshore expertise and deep pockets to finance and develop offshore wind farms in an industry estimated to attract nearly $1 trillion over the next decade.    

Offshore wind opportunities will help Big Oil gain a more prominent role in low-carbon energy, help them reduce operational emissions from offshore oil and gas fields powered by renewable electricity, and advance projects for producing green hydrogen via electrolysis using renewable sources, including offshore wind. 

Investments in offshore wind could come with handsome rewards for the majors. Offshore wind can deliver 25% higher unit operating cash margins in comparison to new field oil and gas projects, according to a new metric and analysis developed by Wood Mackenzie. 

“Even the lowest offshore wind portfolio average operating cash margin is above the upstream average. And the renewable technology’s margins trump deepwater – Big Oil’s highest margin asset class,” Akif Chaudhry, Principal Analyst, Corporate Research at WoodMac, wrote in an analysis this week.

“Our new cash margin metric – operating cash flow per gigajoule equivalent (GJe) – goes beyond traditional comparisons. And it reveals that offshore wind comes up trumps,” Chaudhry added. 

Offshore wind is expected to be a pillar of the energy transition and attract almost $1 trillion over the next decade, with offshore wind capacity jumping tenfold by 2030, from 34 GW in 2020 to 330 GW by 2030, WoodMac said in a report earlier this year. 

Offshore wind technology is proven, and investors have confidence in it, the energy consultancy said in May. Moreover, Europe’s strategy to cut off its dependence on Russian energy could further accelerate offshore wind development. 

“Similarly, competitively priced offshore wind is likely to play an important role in powering electrolysers to produce hydrogen, so some of its growth will be tied to the scaling up of the green hydrogen industry,” WoodMac said. 

More and more companies have been bidding in offshore wind lease rounds and auctions, and European oil majors are participating en masse. 

The first commercial offshore wind tender in 2010 attracted just one bidder. Earlier this year, the ScotWind Leasing offshore Scotland saw bids from more than 60 companies, and all European majors bid and won acreage in the leasing round. 

Shell, BP, Equinor, and TotalEnergies are all betting on developing offshore wind in Europe, the U.S., and Asia and say the sector is a priority area of growth for them. 

BP, with an ambition to be a leading provider of offshore wind energy, plans to develop offshore wind across two leases in the UK’s Irish Sea, with a generating capacity of 3 GW, while in the U.S., it is developing 4.4 GW projects offshore New York and Massachusetts. Shell has more than 4.3 GW of capacity in operation and under construction, and 16.7 GW in the funnel of potential projects (gross capacity) across North America, Europe, the UK, and Asia. Equinor wants to be a global offshore wind energy major and have an installed net capacity of 12-16 GW by 2030, two-thirds of which will be within offshore wind. TotalEnergies has 6 GW of offshore wind projects under development and construction, of which 2 GW are planned to go into production by 2025.

Related: White House Rethinks China Tariffs Amid Taiwan Turmoil

The majors are looking to boost offshore wind development not only to provide electricity to households, but also to electrify offshore oil and gas platforms and produce green hydrogen.  

For example, Equinor is studying possible options for building a floating 1-GW offshore wind farm in the Troll area, with the potential start-up in 2027, which could provide much of the electricity needed to run the offshore fields Troll and Oseberg through an onshore connection point. At the same time, Shell has just announced it will start building Europe’s largest renewable hydrogen plant in the port of Rotterdam, which will use renewable power for the electrolyzer from the offshore wind farm Hollandse Kust (noord), partly owned by Shell. 

Overall, Europe’s Big Oil is well positioned to take advantage of the growing offshore wind industry, analysts say. 

“After years of managing volatility in oil and gas, the Majors are equipped to get the balance between risk and return right. And they are flush with deep pockets of cash to take advantage of the huge upcoming opportunities,” WoodMac’s Chaudhry said. 

By Tsvetana Paraskova for Oilprice.com

Australian Oil Major Stuns Market With Approval Of Alaska Oil Project

By Charles Kennedy - Aug 17, 2022, 

Santos Energy has announced the final investment decision on the Pikka oil project in Alaska, which the Australian company expects to produce 80,000 bpd beginning in 2026.

The first phase of the development at the North Slope deposit will cost $2.6 billion, of which Santos’ share would be $1.3 billion, the company also said. The Australian energy major is partnering with Spain’s Repsol on the project.

“Global oil and gas markets are seeing increased volatility and countries are looking to diversify their supply sources away from Russia, which according to the International Energy Agency, currently produces 18 per cent of the world’s gas and 12 per cent of its oil,” Santos Energy chief executive Kevin Gallagher said.

“Low-carbon oil projects like Pikka Phase 1 respond to new demand for OECD supply and are critical for global and United States energy security, that has been highlighted since the Russian invasion of Ukraine,” he added.

Gallagher noted that Santos has committed to net-zero Scope 1 and Scope 2 emissions—those from a company’s own operations and those from the operations of its suppliers—and that Pikka will be a net-zero project.

Even so, the shares of Santos fell after the announcement, Reuters reported, as the decision surprised traders. The stock decline came despite forecast-beating profits reported for the first half of the year. Santos booked a net profit of $1.27 billion for the period, up from $317 million a year ago.

Reuters noted that analysts had expected Santos to pull out of the Alaska project and sell its 51-percent stake rather than develop it.

The Australian company will probably fund the Pikka project development with proceeds from the planned sale of 5 percent in the PNG LNG project in Papua New Guinea, according to analysts. Santos expects to pocket $1.5 billion from that sale’s LNG gains prominence among investors thanks to higher demand from Europe.

By Charles Kennedy for Oilprice.com

EU Boosts Military Funding To Mozambique To Secure Gas Projects

By Tsvetana Paraskova - Aug 16, 2022, 

As the EU grapples with an energy crisis and seeks alternatives to Russian pipeline gas, the bloc plans to increase its financial support to a military mission in Mozambique – a gas-rich country in Africa plagued by Islamist attacks and insurgents in recent years that have delayed offshore gas projects.

The EU now looks to increase fivefold the financial backing to an African military mission in Mozambique, Reuters reported on Tuesday, citing an internal EU document. 

International oil majors have several projects offshore Mozambique, where large volumes of gas have been discovered in recent years. Liquefied natural gas (LNG) from Africa is one of the EU’s options to replace part of the Russian pipeline deliveries, which have not only been reduced in recent weeks, but are highly uncertain going forward. 

However, insurgents and attacks near areas of LNG developments have stalled some projects in Mozambique, such as that of TotalEnergies. The French supermajor declared last year force majeure on its US$20-billion LNG project in Mozambique following Islamist militant attacks in towns close to the site. The project site is close to the town of Palma in the Cabo Delgado province, where Islamic State-affiliated militants have been active for a few years. The TotalEnergies-led Mozambique LNG Project, for which the Final Investment Decision (FDI) was taken in 2019, is currently on track to deliver LNG in 2024, the company says. 

But Italy’s Eni expects to begin LNG shipments from another project offshore Mozambique in the second half of this year after the group announced in June that the Coral South Project had safely achieved the introduction of hydrocarbons to the Coral Sul Floating Liquefied Natural Gas (FLNG) plant from the Coral South reservoir. 

“Following the introduction of gas in the plant, Coral Sul FLNG will now be ready to achieve its first LNG cargo in the second half of 2022, adding Mozambique to the LNG-producing countries,” Eni said two months ago. 

By Tsvetana Paraskova for Oilprice.com

BP To Sell Mexican Oil Assets As It Ramps Up Renewable Business

By Irina Slav - Aug 16, 2022

BP is selling its oil assets in Mexico as it seeks to focus even more on its renewable energy business.

The political environment in the country is another reason for the decision, Bloomberg reported.

BP has already sold some of its stakes in Mexican oil projects and is currently returning some blocks it won at auctions to the Mexican oil industry regulator, a company representative told Bloomberg.

Like other supermajors, BP entered Mexico during the administration of Enrique Peña Nieto, which enacted sweeping reforms aimed at opening up Mexico’s markets to foreign companies.

Since leftist Andres Manuel Lopez Obrador became president, however, there has been a marked change in attitude. The current government wants to reestablish state-owned companies as the dominant players in energy markets, including Pemex, the oil major.

That’s despite Pemex’s financial troubles and lack of capacity to conduct on its own the exploration and production activities that would reverse the long-term decline in Mexico’s oil production.

According to the Bloomberg report, one of the projects that BP has already quit is a deepwater one, in which it partnered with French TotalEnergies and Norway’s Equinor. The Norwegian company also quit the project, with TotalEnergies buying both their shares.

Another project that BP quit was a shallow-water block it won the rights to develop together with TotalEnergies, Equinor, Hokchi Energy, and Qatar Petroleum. According to the supermajor, the likelihood of success at the block was “very low,” hence its decision to quit it.

BP has one of the most ambitious renewable energy programs among Big Oil majors, first announced in 2020 when Bernard Looney took the reins from Bob Dudley as chief executive.

The company plans to have 20 GW of renewable energy generation capacity by 2025, rising to 50 GW by 2030. As part of its transition to a low-carbon company, BP is also betting big on natural gas and hydrogen, along with carbon capture and storage.

By Irina Slav for Oilprice.com

Bill Gates-Backed Firm Raises $750M To Develop Small Nuclear Reactors

By Tsvetana Paraskova - Aug 15, 2022,

TerraPower, a company working on small-scale nuclear reactor development backed by Bill Gates, has raised $750 million in investment, including from South Korea's second-largest conglomerate, to pursue its plan to manufacture mini-reactors.

TerraPower, a nuclear energy technology company, raised the funding co-led by Bill Gates to manufacture nuclear reactors that would be cheaper than conventional reactors.  

SK Inc, part of South Korea's SK Group, invested $250 million in TerraPower in the fundraising, the company said on Monday.

As the world looks to cut carbon emissions from energy sources, Gates has been betting on small nuclear reactors that could have lower costs than the typical reactors used in nuclear power generation plants. At the same time, nuclear energy generation is zero-emission.

Last year, TerraPower picked a remote coal town in western Wyoming as the site of its first innovative nuclear power plant. The U.S. Department of Energy welcomed the plans and said last November it was "extremely excited about this project."

The DOE plans to invest nearly $2 billion to support the licensing, construction, and demonstration of this first-of-a-kind reactor by 2028.

Earlier this year, TerraPower said the project was underway. During the first three years of this project, TerraPower is focused on advancing the plant design and submitting the construction permit application to the U.S. Nuclear Regulatory Commission (NRC). Early construction activities will likely begin in 2024, TerraPower said in May.

Nuclear energy, especially innovative technologies such as small-scale nuclear reactors, could be an important breakthrough in the quest for low-carbon power generation.

Moreover, since the Russian invasion of Ukraine, nuclear power has returned to the spotlight as a way to reduce dependence on Russian fossil fuels while keeping emissions in check. Even Germany is debating whether to end nuclear power generation at the end of 2022, as planned, in light of the gas crisis. Germany has three remaining nuclear power plants operating, and they should be shut by the end of this year under a plan the country adopted to stop the use of nuclear energy following the Fukushima disaster. Earlier this month, German Chancellor Olaf Scholz signaled that "it could make sense" to keep nuclear power plants operating.

By Tsvetana Paraskova for Oilprice.com

California Might Keep One Nuclear Plant Open

By Charles Kennedy - Aug 15, 2022, 

Anticipating electricity supply shortages well into 2026, California Governor Gavin Newsom has proposed allowing the state’s last-remaining nuclear power plant to continue operations beyond its 2025 planned shutdown. 

The package of legislation, which included aggressive action against climate change,  must be passed by the end of August or be sidelined, according to ArsTechnica. 

Governor Newsom is proposing that the last nuclear plant be allowed to operate for an additional five to 10 years beyond 2025, arguing that it would help with the state’s ambitious targets to reduce carbon emissions. 

The State of California is targeting 90% clean energy in 2035 for electricity generation. 

Saving the last nuclear plant–the 2.2 GW facility at Diablo Canyon–could help towards these goals, according to Newsom’s proposal, as it is carbon free energy. 

Diablo supplies a minimum of 5% and a maximum of 10% of California's electricity.  

That plant has two operational turbines, one set for decommissioning in 2024 and the other for the following year. The new plan–if passed by the legislature–would see the state provide the plant’s operator with a $1.4-billion loan to remain up and running. 

The proposal is expected to meet with significant opposition, not the least from environmentalists and others who are concerned about the seismic faults in the area of the plant, as well as the negative effects on the seawater that is used to cool the facility. 

However, Newsom believes that the state is at risk of missing its ambitious climate targets unless the nuclear plant is allowed to continue operations–suggesting that environmentalists will have to choose between these two eventualities.

“We are behind where we need to be in bringing our clean resources online,” Newsom stated during a webinar on Friday, as reported by E&E News, suggesting that decommissioning the nuclear plant could not happen without more advancement in adding clean energy to the mix. 

Newsom and his aides cited increasing demand and future demand projections for electricity with the growing adoption of electric vehicles, as well as the pressures of climate change and extreme heat. 

By Charles Kennedy for Oilprice.com

‘Right material’ to efficiently remove mercury from water shows promising results

Staff Writer | August 17, 2022 |

Mercury-polluted water. (Reference image by Joe.nehls, Wikimedia Commons).

Researchers at Drexel University have found the right material to efficiently catch mercury —even at low levels— and clean up contaminated bodies of water.


According to lead researcher Masoud Soroush, adsorption —the process of chemically attracting and removing contaminants— seems to be the most promising technology for removing mercury from water, due to its relative simplicity.

“Modern adsorbents, such as resins, mesoporous silica, chalcogenides, and mesoporous carbons, have higher efficiencies than traditional adsorbents, such as activated carbon, clays, and zeolites that have a low affinity toward mercury and low capacities,” Soroush said in a media statement. “However, the problem with all these materials, is that their mercury-removal efficiencies are still low, and they are unable to lower mercury level to less than 1 part per billion.”

Soroush’s team of researchers from Drexel and Temple University has explored synthesizing and using a surface-modified titanium carbide MXene for mercury removal. MXenes are a family of two-dimensional nanomaterials that was discovered more than a decade ago and has demonstrated many exceptional properties.

Titanium carbide MXene

For mercury ion removal, titanium carbide MXene’s advantages are its negatively charged surface and the tunability and versatility of its surface chemistry, rendering it attractive for heavy metal ion removal.

“We knew that 2D materials, such as graphene oxide and molybdenum disulphide, had previously been effective in removing heavy metals from wastewater through adsorption because of their chemical functionalities/structures that attract metal ions,” Soroush said. “MXenes are a similar type of materials but we estimated that titanium carbide MXene could have much greater uptake capacities than these other materials—therefore making it a better sorbent for mercury ions.”

But Soroush’s team needed to make a key adjustment to titanium carbide MXene’s chemical structure to further improve the material for one of its most challenging tasks.

“Mercury is called quicksilver for a reason—it’s quite evasive once emitted into the environment, whether by burning fossil fuels, mining, or waste incineration,” Soroush explained. “It quickly changes its chemical form—increasing its toxicity and making it tremendously difficult to remove from the bodies of water where it inevitably accumulates. So, to attract mercury ions even faster we needed to modify the surface of titanium carbide MXene flakes.”

There is a natural attraction between mercury ions and titanium carbide MXene surface, as metal ions are positively charged and the surface of the MXene flakes is negatively charged. However, to pull mercury ions out of water more strongly the team needed to give this attraction a boost. To this end, they treated the MXene flakes with chloroacetic acid —a process called carboxylation— which provides the MXene with highly mobile, strong carboxylic acid groups and increases the MXene-flakes surface negative charge, improving the ability of the flakes to attract and retain mercury ions.

Faster mercury-ion uptake

The result was a new sorbent material called carboxylated titanium carbide MXene, which demonstrated a faster mercury-ion uptake and greater capacity than all commercially available adsorbents.

“Carboxylated titanium carbide MXene proved to be far superior to sorbent material currently being used for mercury-ion removal,” Soroush said. “Within one minute it was able to remove 95% of mercury ions from a water sample contaminated at a concentration of 50 parts per million, which means it could be effective and efficient enough for use in large scale wastewater treatment.”

Within five minutes, titanium carbide MXene and carboxylated titanium carbide MXene removed 98% of mercury ions from a 10-millilitre water sample contaminated with mercury ions at concentrations between 1 and 1000 parts per million.

“This indicates that both [MXene] and [carboxylated MXene] are effective adsorbents to remove mercury ions from wastewater due to their special structural properties and high density of surface functional groups,” the team wrote in a paper published in the Journal of Hazardous Materials. “Generally, the adsorption mechanism of metal ions follows two steps; at first, the ions are quickly adsorbed on the available active sites, and the process is swift. The adsorption proceeds slower as the adsorption sites fill up, and the ions are required to diffuse into the pores and interlayer.”