China National Offshore Oil Corp. aims to use its expertise from fossil fuels to win a role in the emerging floating wind market, though will continue to make only a slow shift into clean energy.
China’s biggest offshore oil and gas driller sees strong prospects for growth for floating projects, which enable developers to install turbines in deeper waters further from shore where the wind is stronger.
“Our 40 years of offshore operations will give us an advantage in using marine geological exploration, engineering and shipping experiences to develop clean energy,” CNOOC said in a written response to questions.
CNOOC will allocate only five per cent to 10 per cent of capital expenditure on clean energy by 2025 and remains primarily focused on plans to lift fossil fuels output to 600 million to 610 million barrels of oil equivalent in 2022, from 570 million barrels last year.
Local rival PetroChina Co. aims for one-third of its output to come from new energy sources by 2035, while China Petroleum & Chemical Corp., known as Sinopec, expects to spend 30 billion yuan ($4.1 billion) by mid-decade to become a national champion in hydrogen production.
CNOOC plans a floating wind project on a semi-submersible platform about 130 kilometres offshore of Yangjiang, in the South China Sea, and will use the electricity generated to power its Wenchang oil complex. The producer is also developing a similar project to power the Buzzard oil platform in the North Sea.
Those projects should help CNOOC hone its capabilities in a technology forecast to be far more widely adopted over the next decade. By 2035, floating wind should expand to about 20 gigawatts of capacity globally from less than 100 megawatts currently, according to BloombergNEF. Though even then, it’ll account only for about five per cent of the offshore wind sector.
Costs, which are currently as much as double that of traditional bottom-fixed offshore wind, are expected to fall more than 50 per cent by the end of the decade, BNEF forecasts.
© 2022 Bloomberg L.P.