Economy
From molecules to electrons, can Big Oil become Big Power?
The emergence of the electric vehicle and demand among investors and consumers for cleaner energy to limit climate change has pushed the European side of Big Oil to take baby steps towards refocusing their businesses from oil production and refining to electricity via natural gas and renewables.
Their funding for oil exploration dwarfs any alternatives, but they are buying up power generation and retail utilities to integrate with their long-standing natural gas and emerging renewables ventures.
Relatively small investments in electricity aim to help them ride the energy transition by offering households and businesses cleaner power than coal can provide and giving their petrol stations a green edge with EV charging.
Testing an electrification route also helps meet demands from shareholders that they “future proof” their businesses.
The International Energy Agency predicts regulatory changes to curb carbon emissions will mean demand for electricity will grow much faster than that for oil as Asia’s power-hungry middle class expands.
The industry sees oil demand peaking any time from 2020 to 2040.
Diversification is not new to the oil and gas business and has a patchy record at best. Oil majors have bought stakes in coal, household cleaning, pet food, nutrition, shrimp trading, nappies, hotels and steel, with limited success.
Critics say power will not deliver the profits the oil and gas companies need to sustain the large dividends their investors are used to.
BP lost billions in its first foray into renewables 20 years ago when it rebranded itself “Beyond Petroleum”.
It closed its solar manufacturing division in 2011 and tried to get rid of its wind farms but says it now has a more successful model.
“Most of the things we do today are linked to our core capabilities,” Dev Sanyal, head of BP’s alternative energy division, told Reuters.
“If you can start combining molecules and electrons in an integrated offer you start creating something of greater interest.”
Profit is the first challenge when joining the dots between renewables, gas-fired plants and utilities facing growing competition in markets that are fragmenting fast. None of the companies break down their results from renewables or power.
BP returned to solar in 2017 with a 200 million dollars investment in UK solar generator Lightsource and dipped a toe into UK electricity retail the same year by buying a 25 per cent stake in Pure Planet, a small challenger brand supplying some 100,000 customers with renewable electricity.
“The renewables business last year was free cash flow generative… we’ve been moving in a positive trajectory over the past three years,” Sanyal said.
“Today, we have industrial customers and over time there could be retail customers.”
He said BP planned to expand its alternative energy capacity – the biggest among the majors, according to CDP, a climate-focused research provider that works with major institutional investors. Gazprom’s large hydro-power interests put it in second place ahead of Total and then Shell, CDP calculations show.
On retail, the French and Italians are ahead.
French giant Total‘s purchase of Direct Energie last year gave it a portfolio of gas fired and renewable energy power plants and a platform to challenge state-controlled utility EDF .
It is targeting seven million customers in France and Belgium by 2022 and said in a recent investor presentation it aims to make low carbon electricity 15 to 20 per cent of its total offering by 2040.
Eni says it is now Italy’s second largest electricity producer with six power plants, large electricity trading business and two million customers.
Shell says it wants to become the biggest electricity provider and over the past year has made a number of investments including a Brazilian gas-fired power plant and a UK utility.
Last week it renamed that utility Shell Energy and switched all 710,000 customers to 100 per cent renewable electricity, offering them discounts on petrol and electric car charging in its petrol stations.
Mark Gainsborough, head of the Anglo-Dutch company’s new energy division, told Reuters it aims to grow its retail customer base in Britain.
Shell looked into acquiring the retail division of rival SSE in recent months but discussions made little progress due to concerns over the government’s decision to cap most domestic energy prices, industry sources said, an example of the risks facing power markets around the world. Both Shell and SSE declined to comment.
In a sign of the growing competition among the majors for power assets, Total is considering a rival bid to Shell for Dutch energy company Eneco, according to sources close to the matter. Total declined to comment.
Eneco is valued at around three billion euros and has 2.2 million customers and Shell’s Gainsborough said it could provide a template for a power business model.
“The model aspiration is to find an integrated mode with positions in trading and supply and having customer books,” Gainsborough said.
Former BP CEO John Browne, who drove the London-based company’s first push into renewables, said much lower production costs for wind and solar projects and a greater understanding about the future growth of power markets had changed the picture dramatically since then.
“The question is whether you have the skills, the people and the determination to make this work and are you happy that in reality the returns you make are better than the returns you make in your other business,” Browne told Reuters.
Returns on solar and wind projects are typically around 5-10 per cent, according to climate research provider CDP, half of those from many oil and gas projects.
So far the oil majors have committed a small fraction of their annual investment to low-carbon technologies as they balance shareholder demands for returns and innovation.
Shell and Equinor plan to put between five and six per cent of their capex investments into clean energy technologies, while Eni is targeting around four per cent and Total and BP plan about three per cent each, CDP research showed.
Those numbers rise with investments in gas-fired power generation, but are still small enough to swallow if rivals make things difficult, particularly at the retail end where they include supermarkets, fintech startups and Amazon.
“If at the end of the day it doesn’t work, these companies have deep pockets and would be able to spin off power divisions,” said Munir Hassan, Head of Clean Energy at law firm CMS in the UK.
The differential in returns from power versus oil and gas had not changed much, he said, but there was a new impetus because perceptions among shareholders and their children had.
“Some of the oil companies will succeed,” Hassan said. “But I wonder whether they will find it more painful than they expected.”
By: Fabian Apechihin
The Federal Government has suspended the planned implementation of a 15 percent import duty on petrol and diesel.
This was disclosed on Thursday by George Ene-Ita, Director of Public Affairs at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), who urged Nigerians to avoid panic buying.
President Bola Tinubu had earlier, on October 29, approved the imposition of the tariff following a proposal by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji. The approval, conveyed in a letter signed by the President’s Private Secretary, Damilotun Aderemi, was intended to take effect from November 21, 2025.
The proposed policy sought to impose a 15 percent duty on the cost, insurance, and freight (CIF) value of imported petrol and diesel. It was aimed at supporting domestic refineries — such as the Dangote Refinery and modular plants — by making imported fuel less competitive. However, experts cautioned that the move could lead to an increase of up to ₦150 per litre in pump prices and further fuel inflation and transportation costs.
In its latest update, the NMDPRA confirmed that the import duty is no longer under consideration.
“It should also be noted that the implementation of the 15% ad-valorem import duty on imported Premium Motor Spirit (PMS) and Automotive Gas Oil (Diesel) is no longer in view,” the Authority stated.
The agency further assured the public of adequate fuel availability across the country, noting that national stock levels remain within the required sufficiency threshold.
“There is a robust domestic supply of petroleum products — including PMS, AGO, and LPG — from both local refineries and imports, ensuring timely replenishment of depots and retail stations,” the statement added.
NMDPRA cautioned marketers against hoarding, panic buying, or arbitrary price increases, emphasizing that it will continue to monitor the market to prevent any disruption in supply.
“While appreciating the efforts of stakeholders in maintaining smooth and uninterrupted supply, the public is assured of NMDPRA’s commitment to safeguarding national energy security,” the statement concluded.
From Hassan Taiye
The Federal Government of Nigeria, FGN, through the Ministry of Steel Development, has signed a Joint Strategic Cooperation Declaration with Stellar Steel Company Limited.
Stellar Steel Company Limited is a steel-manufacturing enterprise established to operate in Nigeria, with major investment backing from Chinese parent groups: Galaxy Group and RSIN Group based in Fuzhou, Fujian Province, China.
The company has committed approximately US$450 million for a steel plant project in Ogun State, Nigeria, scheduled to begin operations by mid-2026.
This landmark partnership is aimed at revitalising Nigeria’s steel industry and reducing the nation’s dependence on imported steel products, according to a statement signed by the the Principal Information Officer, PIO, Ijomah Opia, for the director, Information and Public Relations in the ministry.
The agreement, signed in Abuja, on Tuesday 28th October, 2025 will see Stellar Steel invest $400 million in the construction of a modern Steel Plant in Ewekoro, Ogun State. The project will be developed in three phases, with the first phase expected to begin production by 2026.
The Minister of Steel Development Prince Shuaibu Abubakar Audu signed the agreement when he hosted Mr Li, President of Inner Galaxy Group and other members of the Stellar Steel Company Limited in the Ministry’s Headquarters in Abuja.
According to Prince Audu, the collaboration aligns with the federal government’s goal of achieving 10 million tonnes of crude steel production per annum by 2030, a major step toward industrial self-reliance and economic diversification.
The minister further stated that the Federal Ministry of Steel Development would facilitate policy and infrastructure support, including inclusion of Stellar Steel’s logistics projects in the National Infrastructure Plan and access to available fiscal incentives.
Highlights of the cooperation includes the followings:
1.Development of a localised iron ore supply chain to reduce import dependence and save over $1 billion in foreign exchange annually.
- Creation of more than 2,000 direct and 20,000 indirect jobs across the steel value chain.
- Promotion of green steel production using clean and energy-efficient technologies.
- Strengthening of Nigeria’s position as a regional steel manufacturing hub in West Africa.
Audi also said that in return, Stellar Steel would prioritise local recruitment and training, partnering with Nigerian universities to build technical and managerial expertise in steel production.
Prince Shuaibu emphasised that this strategic cooperation marks a new era for Nigeria’s steel industry and demonstrates the government’s commitment to sustainable industrial growth and economic transformation.
In his remarks the leader of the delegation, Mr Li assured the minister that Stellar Steel would respect all agreements reached and would ensure the completion of the project in record time and assured that all safety standards will be observed.
Mr Li was accompanied during the visit by Mr You Xiastian, Vice Chairman of RSIN Group, Mr Jackie Den, Vice President of Inner Galaxy Group and Mr Yin, Director of RSIN Group.
He recalled that the Minister of Steel Development, Prince Audu, performed the groundbreaking ceremony of the Steel Plant in Ogun State sometime in April, 2025.
Speaking at the signing, representatives of both parties emphasised that the partnership would strengthen Nigeria’s industrial base, create jobs, and foster technology transfer in the sector.
From Hassan Taiye
A high-level delegation from the European Union (EU) Parliament’s Foreign Affairs Committee, led by Mr. David McAllister, paid a courtesy visit to the Nigerian Senate today October 28, 2025.
“We are here to deepen our understanding of the situation in West Africa and strengthen our partnership with Nigeria,” McAllister said.
Senate President Godswill Akpabio welcomed the delegation, emphasizing Nigeria’s strategic partnership with the EU. “Nigeria is committed to strengthening ties with the EU, highlighting areas of mutual interest, including security, trade, and governance,” Akpabio said.
The delegation, comprising Ambassador Greta Mylott, EU Ambassador to Nigeria and ECOWAS, Miss Zelaya Zorko, Miss Mata Tamido, Sebastian Tankman, General Christophe Gomart, and Sebastian Buharo, is undertaking a comprehensive tour of West Africa, with stops in Nigeria and Ghana.
During the visit, Akpabio shed light on the challenges facing female representation in Nigeria’s parliament. “Women often vote for male candidates, making it difficult for female candidates to win elections,” he noted.
“The Senate is exploring innovative solutions, including constitutional amendments, to boost female participation in the legislative process, with support from organizations like the Black Women’s Forum.”
The EU delegation’s visit aims to foster greater understanding and cooperation between the EU and Nigeria, addressing shared concerns, such as terrorism, climate change, and economic development.
“The EU is committed to supporting Nigeria’s development efforts,” McAllister assured the Senate, emphasizing the bloc’s interest in seeing a stable, prosperous, and democratic Nigeria.
Their visit also includes participation in the forthcoming International Islamic Conference on Security and Governance in West Africa and the Sahel, scheduled for November 4-6, 2025 at ECOWAS Commission.
Akpabio expressed optimism about the potential for enhanced cooperation, highlighting Nigeria’s readiness to work with the EU to address common challenges.
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