From: Reuters
Published November 19, 2007 11:16 AM

StatoilHydro plans bigger renewable energy profile

By John Acher and Wojciech Moskwa

OSLO (Reuters) - Norwegian oil and gas producer StatoilHydro is working to promote carbon capture and storage (CCS), offshore windmills and biofuels as part of a strategy for its renewable energy portfolio.

Chief Executive Helge Lund said on Monday that the more environmentally minded approach was not "advertising" but a way to boost profits at the Norwegian group, which pumps out some 1.7 million barrels of oil equivalent per day.

"We really want to get into this area because over time we believe we can develop it into a profitable business for StatoilHydro," Lund told a seminar on the threats to climate change stemming from the world's growing thirst for oil.

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"We are right now developing a new strategy to define our ambitions that hopefully will lead to this becoming a concrete part of our business," he said of the drive to help combat climate change and limit carbon dioxide emissions.

Lund told Reuters that StatoilHydro's push into renewables will be a gradual build-up and "not a major leap." Details will be part of a company-wide strategy review on January 9.

Lund said his focus will be on three areas -- CCS, offshore windmills and biofuels.

"We need to address CCS with some force," Lund said on the sidelines of the seminar. Statoil already siphons out carbon from gas at its Sleipner field and injects it back into the undersea reservoir. It is also in a group developing CCS technology for a gas-powered power plant in Norway.

Margareth Oevrum, StatoilHydro's executive vice president for technology and new energy, said the Norwegian group was considering "considerable investment" in offshore wind-power, including in the British market where subsidies are high.

"Our goal is to have a broad portfolio of wind projects," Oevrum said. "We need more incentives here in Norway," she added, saying that British subsidies, at 0.5 Norwegian crowns ($0.09) per kWh -- were higher than the expected offshore windmill production cost of 0.38 crowns per kWh.

In biofuels, StatoilHydro aims to be "significant in production, trading and marketing," she said, mentioning a cooperation deal with Brazil's Petrobras and the purchase of a Lithuanian biodiesel refinery stake.

She said biofuels will become an important supplement in transport fuels but will never replace fossil fuels.

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