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2022 Insight

Why the Majors need to consider margins in weighing up offshore wind

Will offshore wind deliver higher operating cash margins than oil and gas? A new metric – operating cash flow per GJe – provides the answers

  

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Akif Chaudhry

Principal Analyst, Corporate Research

Akif focuses on strategy, benchmarking and valuation analysis of offshore wind and carbon within company portfolios.

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Tom Ellacott

Senior Vice President, Corporate Research

Tom leads our corporate thought leadership, drawing on more than 20 years' industry knowledge.

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Erik Mielke

SVP Global Head of Corporate Research

Erik manages our corporate service, leading data-driven analysis and insight into strategies, performance and outlook.

Latest articles by Erik

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Analysis of renewables versus oil and gas investment conventionally focuses on relative risk and returns. But as electrons are set to replace hydrocarbon molecules in Big Energy production portfolios, which will offer the higher unit cash margin?

We compare offshore wind, a core renewables diversification strategy, with upstream oil and gas. Our benchmarking of the Majors’ new field upstream development portfolios with a group of renewable leaders’ offshore wind portfolios, concludes that offshore wind will deliver 25% higher unit operating cash margins than upstream oil and gas.

In our latest insight we cover:

  • The Majors are good at the volume game
  • Returns matter
  • Competition has driven down baseline returns from offshore wind
  • The Majors have a playbook to boost returns
  • Sacrificing stability of returns for higher average returns is the trade-of

Fill in the form at the top of the page for your complimentary insight which includes a full range of charts and data coving the above points.

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