The clamour grows ever louder that oil and gas companies should move wholesale into renewables. However, the experience of one company that did illustrates the challenges involved.
But it opens an opportunity for a bold swoop – whether by a European oil major or a Middle Eastern investor.
Danish Oil and Natural Gas (Dong) was a fairly successful developer of oil and gasfields in the seas of north-western Europe. But in May 2017, it sold its largest fields in Norway.
In November of that year, it renamed itself Orsted, after a Danish physicist (and friend of Hans Christian Andersen), who discovered the connection between electricity and magnetism.
The company concentrated on offshore wind power instead, where its home nation was already a leader. And the first few years under its new strategy were indeed a fairy tale.
By January 2021, it was the world’s biggest offshore wind developer and its shares had soared more than five times to a market capitalisation of almost $80 billion.
That was the high point, followed by a swift tumble. Today its shares are essentially back at the level when it metamorphosed, and it is valued at about $17 billion.
Yet this comes against the backdrop of an expansion in offshore wind globally. Orsted now has 15.5 gigawatts of operating renewable capacity, and another 15.5 gigawatts under construction or awarded.
Unlike onshore, there are few size constraints offshore. The 35 metre-high, 0.45-megawatt turbines that started the Danish wind journey in 1991 have now been replaced by 15-megawatt turbines that are 280 metres, almost as high as the Eiffel Tower.
Offshore winds are stronger and more consistent. Offshore turbines are also away from local communities, meaning objections are unlikely.
The cost of UK offshore wind dropped from £155 per megawatt hour in 2015 to just £37.50 last year, half the current wholesale electricity market rate.
So what has gone wrong?
In the past two years, interest rates have risen sharply, raising the burden of financing capital-intensive long-term projects.
Equipment costs have gone up, reversing a long trend of cheaper systems, and undermining the economics of projects companies had been awarded previously.
Governments have been unwilling to raise the amounts they agreed to pay for clean power. Environmental groups seeking to protect habitats, fishermen worried about disturbances to their catch, and military interests hoarding training grounds combine to frustrate developments.
Last month, New York rejected requests by Orsted, Norwegian state energy company Equinor and others for rises in rates of between 27 and 54 per cent on previously committed projects.
In the UK’s latest offshore wind auction, no companies bid after the government refused to raise the maximum price to reflect the market changes.
Earlier in the year, Swedish utility Vattenfall said it would give up on the Norfolk Boreas wind farm as the higher costs had made it unviable.
Orsted is not the only renewable company facing problems. Siemens Energy, spun out of Siemens in September 2020, has run into severe trouble with faults in the wind turbine blades it sells, following its acquisition of Spanish manufacturer Gamesa in 2017.
It is on the hook for at least $1.7 billion in repair bills, and its shares are down 70 per cent since January 2021. The company is seeking $16 billion in German government guarantees, which it insists is not a bail out, to help it complete its portfolio of industrial projects.
However, there could be an opportunity. Offshore wind power remains an exciting and competitive source of low-carbon electricity. The cost inflation and interest rate rises will work their way through the system as supply chains catch up.
One ambition of the Cop28 conference in Dubai this month is for countries to commit to triple global renewable energy capacity, in line with, for example, the UK’s plans for offshore wind.
The US wants to raise its 50 megawatts of ocean wind today to 30 gigawatts by the end of the decade.
The European oil companies have had ambitious renewable targets and saw offshore wind as one area that might play to their strengths.
BP says it wants 50 gigawatts of all renewables by 2030; France’s TotalEnergies aims for 100 gigawatts; and Equinor for 12 to 16 gigawatts specifically of offshore wind.
But BP and Shell in particular have notably scaled back ambitions, putting more emphasis on profitability. They have discovered that extracting full value from complex offshore wind assets is a specialist job.
Reaching these targets by organic growth or small acquisitions alone looks difficult. Pre-pandemic, it was suggested that to build scale and expertise, an oil major might buy a large renewable company, but valuations ran away from them.
That again looks more in reach for a contrarian investor. The European oil companies sat out the recent wave of US shale consolidation – they have voluminous cash flow and not much idea of how to spend it other than share buy-backs.
If not a European oil company, how about a Middle East investor? Regional companies have big ambitions of their own, but if buying a whole company is too much of a stretch or a political hot potato, they could take a large strategic stake. European governments might object, but this would also look hypocritical.
Such a deal could also bring offshore wind to areas the Europeans have so far been shy of, including the Middle East, Africa and the Caspian. If an investor today can weather a few turbulent years, they could ride a brisk tailwind afterwards.
Robin M. Mills is chief executive of Qamar Energy, and author of The Myth of the Oil Crisis
Killing of Qassem Suleimani
RESULTS
5pm: Handicap (PA) Dh70,000 1,400m
Winner: AF Tathoor, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Handicap (TB) Dh70,000 1,000m
Winner: Dahawi, Antonio Fresu, Musabah Al Muhairi
6pm: Maiden (PA) Dh70,000 2,000m
Winner: Aiz Alawda, Fernando Jara, Ahmed Al Mehairbi
6.30pm: Handicap (PA) Dh70,000 2,000m
Winner: ES Nahawand, Fernando Jara, Mohammed Daggash
7pm: Maiden (PA) Dh70,000 1,600m
Winner: Winked, Connor Beasley, Abdallah Al Hammadi
7.30pm: Al Ain Mile Group 3 (PA) Dh350,000 1,600m
Winner: Somoud, Connor Beasley, Ahmed Al Mehairbi
8pm: Handicap (PA) Dh70,000 1,600m
Winner: Al Jazi, Fabrice Veron, Eric Lemartinel
UAE currency: the story behind the money in your pockets
MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5
Iran's dirty tricks to dodge sanctions
There’s increased scrutiny on the tricks being used to keep commodities flowing to and from blacklisted countries. Here’s a description of how some work.
1 Going Dark
A common method to transport Iranian oil with stealth is to turn off the Automatic Identification System, an electronic device that pinpoints a ship’s location. Known as going dark, a vessel flicks the switch before berthing and typically reappears days later, masking the location of its load or discharge port.
2. Ship-to-Ship Transfers
A first vessel will take its clandestine cargo away from the country in question before transferring it to a waiting ship, all of this happening out of sight. The vessels will then sail in different directions. For about a third of Iranian exports, more than one tanker typically handles a load before it’s delivered to its final destination, analysts say.
3. Fake Destinations
Signaling the wrong destination to load or unload is another technique. Ships that intend to take cargo from Iran may indicate their loading ports in sanction-free places like Iraq. Ships can keep changing their destinations and end up not berthing at any of them.
4. Rebranded Barrels
Iranian barrels can also be rebranded as oil from a nation free from sanctions such as Iraq. The countries share fields along their border and the crude has similar characteristics. Oil from these deposits can be trucked out to another port and documents forged to hide Iran as the origin.
* Bloomberg
Everton 1 Stoke City 0
Everton (Rooney 45 1')
Man of the Match Phil Jagielka (Everton)
The Lost Letters of William Woolf
Helen Cullen, Graydon House
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Killing of Qassem Suleimani
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
Zayed Sustainability Prize
Russia's Muslim Heartlands
Dominic Rubin, Oxford
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Match info
Manchester United 4
(Pogba 5', 33', Rashford 45', Lukaku 72')
Bournemouth 1
(Ake 45 2')
Red card: Eric Bailly (Manchester United)
LAST 16
SEEDS
Liverpool, Manchester City, Barcelona, Paris St-Germain, Bayern Munich, RB Leipzig, Valencia, Juventus
PLUS
Real Madrid, Tottenham, Atalanta, Atletico Madrid, Napoli, Borussia Dortmund, Lyon, Chelsea
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
EXPATS
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if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
RESULT
Arsenal 2
Sokratis Papastathopoulos 45 4'
Eddie Ntkeiah 51'
Portsmouth 0
Get Out
Director: Jordan Peele
Stars: Daniel Kaluuya, Allison Williams, Catherine Keener, Bradley Whitford
Four stars
BUNDESLIGA FIXTURES
Friday (all kick-offs UAE time)
Hertha Berlin v Union Berlin (10.30pm)
Saturday
Freiburg v Werder Bremen (5.30pm)
Paderborn v Hoffenheim (5.30pm)
Wolfsburg v Borussia Dortmund (5.30pm)
Borussia Monchengladbach v Bayer Leverkusen (5.30pm)
Bayern Munich v Eintracht Frankfurt (5.30pm)
Sunday
Schalke v Augsburg (3.30pm)
Mainz v RB Leipzig (5.30pm)
Cologne v Fortuna Dusseldorf (8pm)
The%20Beekeeper
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EDavid%20Ayer%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EJason%20Statham%2C%20Josh%20Hutcherson%2C%20Emmy%20Raver-Lampman%2C%20Minnie%20Driver%2C%20Jeremy%20Irons%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E3%2F5%3C%2Fp%3E%0A