Things are really changing in the land of black gold, in an almost schizophrenic position: it still fills its coffers with petrodollars, but investors increasingly avoid it and don’t give it more than three decades before. to gradually disappear after a century of domination. In Europe, companies are taking the lead… to ensure their backs: they are turning into multi-energy producers offering less hydrocarbons and more carbon-free products.
Let’s put aside the Danish Dong, which became 100% renewable energies in 2018 under the name Orsted after the sale of its oil and gas activity by the State, its main shareholder. The Italian ENI will therefore be the first oil group to split in two and to introduce its activity in renewable energies on the stock market, undoubtedly followed by the Spanish Repsol. He announced, Monday, November 22, that its green subsidiary (wind, solar, electrical terminals, marketing), listed in Milan in 2022, will be called “Plenitude”.
Business model
The parent company will keep 70% of this company whose market value could reach 10 billion euros, according to RBC Capital Markets. Patron of the “six-legged black dog” spitting a red flame, his historic emblem since 1953, Claudio Descalzi judges that Plenitude, relieved of all debt from the start, will be more able, alone, to provide 100% energy without CO2 by 2040. A considerable ambition, since it has set itself as “Top priority” reduce its direct and above all indirect carbon emissions to zero (scope 3) by this time.
Ecological transition requires, according to Mr. Descalzi, a new business model. On the markets, electricians powerful in low-carbon production are moreover better valued than oil companies. The proof by Italy: for a long time the first capitalization of the Milan Stock Exchange, ENI (44 billion) is worth less than Enel (70 billion). And by Spain: Iberdrola (64 billion) weighs four times more than Repsol in the place of Madrid.
This business model did not convince the leaders of the three European majors, Royal Dutch Shell, BP and TotalEnergies, which defend integrated companies. For the moment, and against the advice of some shareholders. Third Point, activist Daniel Loeb’s fund, has just invested hundreds of millions of dollars in Shell with the clearly stated objective of separating “oil & gas” from green production. Across the Atlantic, ExxonMobil or Chevron are still not converted to wind and solar power. At Big Oil, there is still nothing to separate between “black” and “green”.