Royal Dutch Shell is buying French renewable power company EOLFI as part of its plans to ramp up the oil major’s electricity business, the company said on Nov. 5.
EOLFI has largely focused on solar and wind projects, including offshore wind farms. Offshore wind is one of the fastest growing renewables markets, with floating structures the technology’s next frontier because they utilize waters that are too deep for traditional turbines fixed to the seabed.
Shell, which generates most of its revenue from oil and gas, wants to become the world’s largest electricity company and expects to invest $2 billion to $3 billion a year—nearly 10% of its overall spending—on its power division by 2025.
“We believe the union of EOLFI’s expertise and portfolio with Shell's resources and ability to scale up will help make electricity a significant business for Shell,” Offshore Wind Shell vice president Dorine Bosman said in a statement.
Shell did not disclose financial details of the deal, which is expected to close in December.
EOLFI is part of a group developing a pilot project off the coast of Brittany, France, as it ramps up activity in a market the International Energy Agency says could attract a cumulative $1 trillion of investment by 2040.
The U.K. has the biggest offshore capacity, but expansion is gathering pace across the globe, especially in the United States and Asia.
Devon Energy had been actively shopping the Permian Basin assets, and others in the Rockies, the past several months.
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France's Total, Norway's Equinor, Russia's Rosneft and U.S.-based Chevron hold minority stakes in JVs with Venezuela's PDVSA that produce crude and operate oil upgraders.