As the collapse in global oil prices wreaks havoc on the oil industry, Europe’s second largest oil and gas company said it would ramp up investments in renewable energy.
Total SA, the French oil major, plans to invest $500 million in renewable energy over the next year, primarily in biofuels and solar power.
The French company said in a presentation to investors it wanted to “take advantage of fast growing renewable market” to build a profitable business.
In 2011, Total paid $1.4 billion for a majority equity stake in SunPower, one of the largest U.S. solar manufacturers based in San Jose, California. Earlier this year, the company announced plans to turn an unprofitable oil refinery into a biofuels plants. The conversion will cost more than $200 million.
In May, Patrick Pouyanne, the Chief Executive Officer of Total, said the company would increase spending on renewable energy as part of an effort to reorient the future mix of Total’s energy portfolio. Of course, half a billion dollars is not necessarily as big for Total as it would be for most companies. Total has invested about $24 billion in energy projects so far this year.
Earlier this year, a half dozen of Europe’s leading oil and gas companies, including BP, Eni SpA, Shell, Statoil, Total and the BG Group, sent a joint letter to the top climate change official at the United Nations that urged him to put a price on carbon emissions at an international climate summit scheduled to take place in Paris in December.
“Climate change is a critical challenge for our world,” the letter said. “We need governments across the world to provide us with clear, stable, long-term ambitious policy frameworks.”