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Oil companies do not stand a chance to survive if they do not transform, France’s Energy Transition Minister Agnès Pannier-Runacher told a French radio program this weekend.
There is an urgent need to get out of fossil fuels, Pannier-Runacher told Radio France.
“If oil companies do not transform, they will not have a chance of survival in the coming years,” the French minister noted.
Major oil and gas companies, including France’s TotalEnergies, have increased investments in their renewable energy businesses in recent years. TotalEnergies, for example, has boosted its solar and wind power portfolio, while it continues to bet on liquefied natural gas (LNG) projects and trading to meet global gas demand amid a major shift in the market after Russia cut off supply to most of Europe last year.
The other supermajors are also on a path to “transformation,” or “performing while transforming” as BP’s chief executive Bernard Looney says.
Last year’s energy crisis, however, prompted BP, as well as Shell, to invest in oil and gas more and to scrap some plans for reduction in fossil fuel production in the face of the energy trilemma—security, sustainability, and affordability.
In June, Shell raised its dividend by 15%, effective from the second quarter 2023 interim dividend, as the UK-based supermajor pledged to grow its gas business and extend its position in the upstream.
“It is critical that the world avoids dismantling the current energy system faster than we are able to build the clean energy system of the future. Oil and gas WILL continue to play a crucial role in the energy system for a long time to come with demand reducing only gradually over time,” Shell’s chief executive Wael Sawan said on Shell’s Capital Markets Day.
“Continued investment in oil and gas is critical to ensure a balanced energy transition,” Sawan added in the pivot to ensure today’s energy needs, similar to what BP announced in February this year.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.