(Oil Price) – Japanese oil and gas firm Japex is pivoting back to its core business after seeing poor returns in the renewable energy sector, as it becomes the latest major company to scale back green energy investments.
“For now, the investment focus will remain on oil and gas exploration and production… as securing a fair return from renewable energy sources such as offshore wind is challenging due to rising costs,” Japex’s president Michiro Yamashita told Reuters in an interview published on Thursday.
Japex, which is active in exploration and production globally, including in the UK and Norway, wants to buy an operatorship in a U.S. shale project, too.
“My biggest challenge now is acquiring a tight oil operator business in the U.S. and building an investment structure for sustainable profits,” the executive told Reuters.
Japex will aim to reach such an agreement in 2025 or in 2026, Yamashita said.
Japex participates in several tight oil development projects in the southern area of Texas.
Last year, Yamashita said that Japex believes the U.S. is the most attractive destination for oil and gas investments.
In the next few years through 2030, Japex targets to invest more in oil and gas and less in renewable energy, the executive told Reuters.
The Japanese company follows in the footsteps of Europe’s oil majors Shell, Equinor, and BP, which have all scaled back their investments in renewables.
Shell and Equinor have already announced significant reductions in their commitment to renewable energy.
BP last week pledged to fundamentally reset its strategy as it booked its lowest annual and quarterly profits in years and seeks to push up its stock performance and regain investor trust.
“Building on the actions taken in the past 12 months, we now plan to fundamentally reset our strategy and drive further improvements in performance, all in service of growing cash flow and returns,” BP’s chief executive Murray Auchincloss said in a statement.
By Michael Kern for Oilprice.com
