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

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

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