100 companies dominate sea industries like offshore energy

Source: By Valerie Yurk, E&E News reporter • Posted: Monday, January 18, 2021

A hundred companies earn most of the revenue generated from ocean-based industries like offshore energy, according to a new study, giving a handful of large corporations outsize sway over global sustainability efforts.

The companies, dubbed the “Ocean 100,” together have a gross domestic product equal to Mexico’s and, if they were a country, would have the 16th-largest economy in the world, according to research published this week in Science Advances.

The study focused on eight sea industries: offshore oil and gas, offshore wind, marine equipment and construction, seafood production and processing, container shipping, shipbuilding and repair, cruise tourism, and port activities.

The 100 companies generated $1.1 trillion in 2018, about 60% of revenue from the industries that year.

Offshore oil and gas dominated the Ocean 100, with those companies generating about 65% of the industry’s revenue at $830 billion. The offshore wind industry had the smallest presence, with only one company making it into the Ocean 100. Of the 10 largest companies in the ocean economy, nine are part of the offshore oil and gas industry, the study said, with Saudi Arabian Oil Co. collecting the most revenue annually. It was followed by Petróleo Brasileiro SA, National Iranian Oil Co., Petróleos Mexicanos and Exxon Mobil Corp.

Within each of the eight sectors, the top 10 companies generated an average of 45% of total revenue across their entire respective industries, the researchers found.

“That wasn’t too surprising,” said John Virdin, co-author of the study and director of the Ocean and Coastal Policy Program at Duke University. “It’s expensive to operate in the sea on the water. It takes a lot of capital, it takes a lot of expertise — there are pretty high barriers to entry.”

These 100 companies will determine the future of oceans, Virdin said, because they are key players in meeting sea sustainability goals.

Henrik Österblom, co-author and science director at the Stockholm Resilience Centre, said the corporations’ leaders have important decisions to make.

“Senior executives of these few, but large companies, are in a unique position to exercise global leadership in sustainability,” he said in a statement. “The fact that these companies are headquartered in a small number of countries also illustrates that concerted actions by some governments could rapidly change how the private sector interacts with the ocean.”

The ocean economy is expanding quickly despite the deterioration of ocean health. An Organisation for Economic Co-operation and Development report published in 2016 said that by 2030, ocean industries have the potential to outperform the global economy as a whole, and regulations and governments show slim chances of keeping up with rapid development.

One of the top emerging ocean industries is offshore wind, which is projected to increase fiftyfold by 2050.

To meet sustainability goals, the researchers suggest that corporations form “green clubs,” or corporate coalitions that monitor and create incentives for green measures, as well as encourage customers and shareholders to invest in companies that promote sustainable oceans.

Virdin at Duke said it’s uncertain how many companies will voluntarily adhere to sustainability goals.

“We don’t have any sort of naive hope that the companies will be free from the pressure of the marketplace,” he said. “But it’s hard to imagine solutions without these large companies going from saying ‘We’ll do no harm’ to ‘We’ll do some good.'”

If these large firms don’t act, food sources, jobs, biodiversity and clear oceans are at stake, Virdin said. “We just don’t have a choice, I think.”