National oil companies face competing priorities of decarbonising their activities while sustaining oil and gas revenues that bankroll economic development and pay for basic social welfare services. Can NOCs in developing countries follow the example of Denmark’s Ørsted, which morphed from a small state oil and gas company into global renewables champion?
Ørsted is frequently held up as the poster-child of NOC diversification. The state-backed energy company, formerly known as Danish Oil and Gas (DONG), embarked on root-and-branches reform in 2006 that saw it divest upstream assets and invest heavily in renewables. The company today generates 95% of its pre-tax earnings from offshore wind.
This feat will prove tricky for other NOCs to pull off. Ørsted benefitted from first mover advantage, selling some fossil fuel assets into a comparatively healthy market for oil and gas M&A deals.
Publicly-traded oil companies and their financiers are now subject to a h…