Shell said on Thursday it would withdraw from another floating offshore wind project, another of the company's exit from the offshore wind sector.
Shell said it would put its position in South Korea 180% of the 25 GW Munmubaram project** is given to its joint venture partner Hexicon, which holds 100% of the project. Shell's compensation for the remaining shares in the project will be US$5 million in cash, plus a US$50 million profit-sharing agreement for a period of three years, commencing at the commencement of the project.
Shell decided last year to abandon its 1% to 2% annual reduction in oil production. Shell and other major oil companies have found that the transition to alternative energy sources such as wind has not had the desired effect in terms of expected returns. At the same time, oil continues to prove its mettle in the profit sector, which, of course, is aided by OPEC production cuts and geopolitical turmoil.
Despite this, major oil companies have made a profit of more than $250 billion since the start of the Russia-Ukraine crisis. Of course, this happened after a few difficult years caused by the coronavirus. In fact, according to a recent report by Global Witness, the world's five largest oil companies – BP, TotalEnergies, ExxonMobil, Chevron and, of course, Shell – have distributed about $200 billion to their shareholders.
On the other hand, the profitability of wind power projects has taken a major blow due to soaring raw material and equipment costs, and developers around the globe are pulling out. In the United States, for example, even after the Department of the Interior approved the large-scale offshore wind project Empire Wind 2 in November 2023, developers cancelled the project only a few months later, citing compromised commercial viability. BP and Equinor recorded 8US$400 million in impairments related to failed wind projects, with Orsted, the world's largest offshore wind developer, recently taking on US$4 billion worth of impairment charges after canceling two planned offshore wind projects off the New Jersey coast in the United States. (Compiled by Xiao Chen).
For more exciting content, please visit WeChat*** Smart Energy Window