Shell They Say Goodbye? Energy Giant Might Give Norway's Wind Farm the Cold Shoulder

Shell PLC SHEL shares are trading lower premarket Thursday. The company reportedly may pull out of an ongoing tender for Norway’s first commercial offshore wind farm on concerns over project’s profitability.

Shell, which is part of a consortium with two local Norwegian utilities, has applied for pre-qualification to build Norway’s first bottom-fixed offshore wind farm at Soerlige Nordsjoe II, in the North Sea, reported Reuters.

Notably, as per the report, the tender comprises building bottom-fixed wind turbines with a capacity of 1.5 gigawatts (GW), which is expected to be a stepping stone for major offshore power developments in Norway from 2040.

The tender offers subsidies amounting to 23 billion Norwegian crowns ($2.17 billion), but industry representatives and lobby groups are skeptical about the adequacy of the amount.

At an energy conference in Oslo, Shell’s Norway country manager, Marianne Olsnes, said that the business case was “not looking great.” The report further cited Olsnes saying, “We might not bid.” 

Although the company has done no final discussion, Olsnes said to Reuters that the tender conditions were “very challenging” and added, “But of course, we are not done with the pre-qualification, so we don’t even know whether we are still in the game.”

Also Read: Shell’s Hydrogen Exit In California Deals A Major Blow To State’s Green Mobility Drive

Earlier this month, the oil giant reported revenue of $78.73 billion, missing the consensus of $84.71 billion, and adjusted earnings per ADS for the quarter of $2.22 was above the consensus of $0.97.

Price Action: SHEL shares are trading lower by 1.26% at $61.95 premarket on the last check Thursday.

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