**SLB Accelerates Carbon Capture Technology with $380 Million Investment in Aker Carbon Capture
In a strategic move to bolster carbon capture technology, SLB, the oilfield services powerhouse formerly known as Schlumberger, has announced a significant investment in Norway's Aker Carbon Capture. The company is set to acquire an 80% stake in the carbon capture specialist for approximately $380 million (4.12 billion Norwegian kroner). This major deal underscores SLB’s commitment to advancing lower-carbon technologies and is slated for completion by the end of the second quarter.
SLB’s rebranding efforts in 2022 highlighted its shifting focus towards sustainable energy solutions. With an ambitious target, set by CEO Olivier Le Peuch, to generate $3 billion in revenue from its new energy business by 2030, carbon capture and storage (CCS) plays a pivotal role in this vision. SLB is already actively participating in over $400 million worth of tenders related to CCS, marking its commitment to being at the forefront of emission reduction technologies.
Carbon capture, a method to significantly reduce carbon dioxide emissions from industrial sources, involves trapping CO2 at its emission point and storing it underground to mitigate its impact on the atmosphere. Aker Carbon Capture is lauded for its proprietary technology that captures CO2 emissions using a unique mix of water and organic amine solvents. This breakthrough is particularly relevant for heavy industries like cement, coal, gas, and refineries that are historically challenging to decarbonize.
The International Energy Agency (IEA) has emphasized carbon capture as a key component in achieving net-zero emissions by 2050. However, it also cautions the oil and gas industry against overly depending on CCS as the sole solution for climate goals. According to Le Peuch, for carbon capture and storage to meet net-zero objectives, it must scale up by 100 to 200 times within the next three decades. This is a testament to the critical role CCS must play in the sustainable transformation of industries with high carbon footprints.
Despite the proven potential of carbon capture technology, its deployment on a commercial scale has been hindered by high costs and complex logistics. The IEA’s roadmap to net-zero emissions stresses the need for the CCS industry to demonstrate its capability to operate effectively at scale, pointing out the technology's history of underperformance.
SLB’s latest investment in Aker Carbon Capture not only showcases the company's dedication to leading the energy industry's transition to more sustainable practices but also aligns with global efforts to combat climate change through innovative technological solutions. As SLB navigates through its journey towards a lower-carbon future, its focus on carbon capture technology is poised to play a crucial role in achieving environmental sustainability and operational excellence.
Analyst comment
Positive news: SLB’s $380 million investment in Aker Carbon Capture reflects their commitment to advancing lower-carbon technologies. This aligns with SLB’s rebranding efforts and CEO’s target to generate $3 billion in revenue from their new energy business by 2030. Carbon capture is a key component in achieving net-zero emissions, and Aker Carbon Capture’s technology is relevant for decarbonizing heavy industries. However, the deployment of carbon capture on a commercial scale has been hindered by high costs and complex logistics. Despite this, SLB’s investment shows their dedication to environmental sustainability and operational excellence. As an analyst, I expect the market for carbon capture technology to grow as more industries seek to reduce their carbon footprint.
