By Sunshine Nalule
On May 17, 2020, Reuters reported that the major oil and gas companies in Europe including BP, Shell and Total were increasingly focusing on investing in green renewable energy projects as opposed to oil.
The news site reported that faced with the realisation that European countries are likely to prioritise low carbon green energy investments in their post-COVID economic stimulus programmes, the major oil companies had cut planned investments in oil and gas. However, they had not extended the same cuts to green renewable energy projects.
For instance, Reuters reported that while Total still plans to spend $1.5 -$2 billion on its low-carbon business, the company cut its overall 2020 spending to $15 billion from $18 billion. This cut of $3 billion did not affect the planned renewable energy investments.
In addition, BP “aims to keep its previously planned $500 million in spending on low-carbon initiatives this year, despite a company-wide spending cut of 20% in the wake of the coronavirus,” Reuters reported.
More so, Shell’s planned budget cuts may not extend to its programme on renewables and low-carbon technologies.
The chief and other senior executives from the above companies explained that as the European Union (EU) looked towards transitioning to green renewable energy as opposed to oil in the post-COVID era, the companies were also positioning themselves to invest more in the EU’s energy of choice, renewable energy.
While the oil majors are looking to ensure that they invest in clean renewable energy that promotes environmental conservation, addresses climate change concerns and reduces negative impacts on vulnerable communities in Europe, the same companies are planning on rolling out major oil and gas investments in Africa. In Uganda for instance, Total signed a $575 million deal to acquire Tullow Oil’s stake in Uganda’s oil industry.
Through the deal that was announced last month, the company reiterated its commitment to investing in Uganda’s oil sector. Shell and BP also continue to invest in oil and gas projects in Africa.
This begs the question: why are Total and other oil companies investing in an energy system in Africa that other countries are rejecting? Don’t they think that Africa needs clean energy too and that the continent that is already suffering some of the worst impacts of climate change such as floods, landslides, destruction of multi-billion properties such as roads, deaths and others needs clean energy as well?
The oil majors need to look inside themselves and do better for Africa. They argue that Africa needs the revenues that will be generated from oil and gas investments but, as more and more countries or cities such as the UK, Netherlands, Amsterdam and others phase out oil and gas cars, the demand for oil will slump. This will likely lead to lower oil prices, as was seen during this pandemic when oil prices in the US fell below zero. When this happens, debt-ridden African oil-producing countries will be left with expensive assets such as oil refineries, pipelines and others that are producing a commodity that the world no longer needs.
This will be economically catastrophic and must be avoided. Oil companies should therefore not discriminate against African countries. They should invest in clean renewable energy on the continent. Development partners, financiers and others should also support green energy as opposed to oil investments.
The writer is a youth clean energy champion.