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Norway insists Statoil keeps renewables focus
August 24, 2010 / 4:36 PM / 7 years ago

Norway insists Statoil keeps renewables focus

* PM says Statoil should stick with renewables projects

* Statoil concerned green push may hit profitability

By Wojciech Moskwa

STAVANGER, Norway, Aug 24 (Reuters) - Norway’s centre-left government told its majority-owned oil major Statoil (STL.OL) on Tuesday to remain in renewable energy projects despite concerns by the company over their profitability.

Statoil’s chief executive has said that renewable energy must become profitable to attract investment, and that within three to four years it may consider whether it makes sense for an oil company to branch out of renewables. [ID:nLDE67M0QZ]

In response, Prime Minister Jens Stoltenberg told reporters at a large oil and gas conference in western Norway that the government “would like to have Statoil invest in renewables” and that it was working to make such investments more profitable.

Norway’s Petroleum and Energy Minister Terje Riis-Johansen said that renewables should be part of Statoil’s strategy, adding that this was a signal from the firm’s biggest owner.

“It is necessary that the big companies are engaged. We need their knowledge to develop new energy sources and bring down costs,” Riis-Johansen told Norway’s NTB news agency.

Public officials in Norway usually refrain from commenting on decisions at state-owned firms.

The spat also highlights the reluctance of energy companies to continue to pile money into renewables at a time when the political will to put a high price on carbon emissions -- and provide incentives for companies to turn green -- appears weak.

The 67-percent-state-owned Norwegian company, which produces about 2 million barrels of oil equivalent per day, has pledged to invest 5 billion Norwegian crowns in a wind farm off Britain.

It it is also involved in developing offshore wind technology and is a partner of the government in a carbon-capture testing facility.

Its total spending on renewables remains only a fraction of its $13 billion annual oil and gas capex.

Marius Holm, deputy chief of environmental group Bellona, said that the government had effectively told Statoil that its potential exit from renewable energy projects would be “completely unacceptable”.

He said the government did not want Statoil to “bet against” the success of any future global climate talks by ditching its renewable projects.

The centre-left government sees itself as a champion of green causes and has on occasion used its oil wealth to fund projects aimed at limiting emissions of greenhouse gasses blamed for global warming.

But a study showed that Norway spends five times more on subsidies to the oil industry -- which provide a quarter of the country’s GDP -- than on rewewable energy. [ID:nLDE67N0X5]

With reporting by Gwladys Fouche, Joachim Dagenborg and Ole Petter Skonnord, editing by William Hardy

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