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Aria Melton
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Aria Melton is a green entrepreneur. She reads widely on economics and environmental issues and supports animal rescue charities. Aria successfully started, operated, and later sold two green businesses. She has a keen interest in investing in companies that make a difference in the world and... More
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Aria Melton - Ethical Investing
  • I'm An Environmentalist And I'm Recommending An Oil Company 1 comment
    Jun 1, 2012 2:22 AM | about stocks: STO

    Yes, you read that correctly.

    I'd love it if every community on Earth could produce enough clean, safe, renewable power to meet all of its energy needs, but in the vast majority of cases, we are simply not there yet. Oil and natural gas companies are going to be with us for a while.

    Some of these companies pollute. Some of them have been linked to questionable business practices, especially in other countries.

    And one is about as close to a model corporation as an oil company can get.

    I first read about Statoil (NYSE: STO) in an article about Scotland's plan to have 100% renewable energy by 2020. Scotland's eastern coast is on the North Sea, known for its strong winds and becoming something of a renewable-energy hub shared with several neighboring countries - chief amongst them Norway.

    I recently blogged about Norway's sovereign fund, which hasn't suffered in the least from focusing on ethical companies. Statoil is a Norwegian company, and the government owns 67% of the company's shares.

    Statoil is the world's 13th largest oil and gas company - not a global dominator, but it has other good points. A look into the company's history showed far fewer controversies than most oil and gas providers (I have yet to find an energy company with a spotless record).

    Statoil's Hydrogen Technologies division is a leader in alkaline electrolysis technology (creating hydrogen and oxygen from water), which could eventually replace depleted fossil fuel reserves. The company has also begun branching out into biofuels, wind power, and geothermal energy.

    Perhaps most impressively, Statoil has publicly stated a goal of "zero harm to people and the environment" and is backing it up with careful water management, waste management, attempting to reduce emissions from their facilities, capturing and storing carbon dioxide, and integrating environmental monitoring on a daily basis.

    Some companies flagrantly violate human rights in faraway countries. Not Statoil. Their corporate policies stipulate human rights and fair labor conditions, including the rights of indigenous people who may be affected by Statoil's operations. The company belongs to the Business Leaders' Initiative on Human Rights, and supports the United Nations and Amnesty International.

    And it gets better: Statoil has an outstanding balance sheet. P/E is excellent at 5.7, and the company pays a 4.1% dividend. I would prefer it if Statoil had a little more cash and a little less debt, but their debt is more than acceptable given the company's high market cap and the equipment-intensive nature of their operations. Statoil's production is also rising, and will likely continue to rise due to recent successful exploration in Tanzania, the Gulf of Mexico, and along the Norwegian continental shelf.

    Statoil's current price is $22.70, and although I would love to snatch it up at a lower price (I am considering selling the October $20 puts), I consider it a good buy under $25. Oil wells and wind farms take time to build, so it may take a few years, but I believe Statoil will deliver healthy returns.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: oil, energy, natural gas Stocks: STO
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  • User 26746623
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    Your info is unfortunately outdated. Statoil has over the last two years moved more and more out of the renewbale energy sector. and today more or less only some offshore wind activities remains. In example, the electrolyser company you are referring to (Hydrogen Technologies) was sold out of the company in june 2011, and is today named NEL Hydrogen (see http://bit.ly/1nkzQ8B).

     

    Statoil is today focussing even more narrow than other oil&gas companies - purely on upstream oil & gas activities.
    8 May, 03:32 AM Reply Like
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