Analysts: Utility Investment Will Become Increasingly Favored by Oil Majors
Investment into the utility space, both in terms of power generation and distribution, will become an increasingly favored strategy by oil majors through the longer term, according to oil and gas analysts at BMI Research.
“By investing in power plants, distribution and electricity market activities, oil majors are looking to increase the vertical integration of the gas value chain, which traditionally has not formed part of their core business model,” the analysts said in a report sent to Rigzone.
BMI said natural gas is set to gain ground globally due to strong policy support at a governmental and supranational level.
“Greater exposure to natural gas supports efforts towards emissions reduction, through its better carbon emission performance relative to coal, which will help companies answer rising social pressures and navigate ongoing changes in global regulatory and investment landscapes,” the analysts stated.
Earlier this month, France’s oil major Total S.A agreed to buy Paris-based utility Direct Energie.
“This friendly takeover is part of the group’s strategy to expand along the entire gas-electricity value chain and to develop low-carbon energies, in line with our ambition to become the responsible energy major,” Chairman and CEO of Total, Patrick Pouyanné, said in a company statement on April 18.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Papua LNG Partners Take Step Toward Investment Decision (Nov 19)
- Total May Source LNG from Louisiana and Baja Projects (Nov 05)
- Gasoline Retailers Face Supply Shortage Due to Mexico Fuel Theft (Nov 01)