One of Europe's biggest oil companies is taking 'oil' out of its name

New York City wants oil companies to pay for climate change
New York City wants oil companies to pay for climate change

Oil made Norway rich. Now it appears to be something of a dirty word.

State-backed Statoil (STO) announced Thursday that it would change its name to Equinor to reflect its shift toward cleaner energy.

"Reflecting on the global energy transition and how we are developing as a broad energy company, it has become natural to change our name," CEO Eldar Sætre said in a statement.

The government of Norway, which owns two-thirds of the company, has approved the change. The switch will take effect in May.

Statoil earns a majority of its revenue from oil and gas, but it's also building up its renewable energy business. It has wind farms off the coasts of the United Kingdom, the United States and Germany.

The company said it plans to allocate 15% to 20% of its investment to renewable sources by 2030.

The announcement comes just months after Norway's $1.1 trillion investment fund, built up over decades from state energy revenues, said it was planning to dump oil and gas stocks.

The fund's managers recommended in November that oil and gas investments worth roughly $37 billion be sold in order to protect the country against a permanent drop in energy prices.

Statoil explained in a statement that its new name combines words such as equal, equality and equilibrium with Norway.

Related: Norway's pension fund wants out of oil stocks

But Per Magnus Nysveen, head of analysis at Rystad Energy in Oslo, Norway, said he had mixed emotions about the name change.

"My first reaction was surprise," he said. "It sounded kind of exotic, not really Norwegian."

Nysveen said he doesn't approve of removing "oil" from the name.

"I'm not so favorable on that," he said. "Oil is something that is needed by so many people ... I think that is a little overreaction to a [trend] that we are seeing right now."

Aled Jones, director of the Global Sustainability Institute at Anglia Ruskin University in the UK, said he hopes that Equinor signals a genuine shift away from the "old energy system."

"If Statoil really embraces a low carbon future then that is to be applauded, however, it remains to be seen if this is more than 'greenwash,'" he said.

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