In a significant shift for the energy sector, major oil and gas companies are expanding their presence in the lithium industry, signalling a strategic pivot towards the burgeoning electric vehicle (EV) market.
ExxonMobil, Equinor, and Rio Tinto are leading this charge, securing strategic lithium assets, particularly in North America.
ExxonMobil, traditionally known for its oil and gas operations, has made notable strides in the lithium sector.
The company recently signed a non-binding lithium supply deal with battery parts maker LG Chem, marking its second agreement to supply lithium from its proposed Arkansas project.
This move allows ExxonMobil to incorporate LG Chem’s lithium quality specifications into its design plans, potentially supplying up to 100,000 metric tonnes of lithium over several years.
Norwegian state oil company Equinor has also entered the fray, investing up to $133 million for a 45 per cent stake in Standard Lithium’s projects in Arkansas and Texas.
This investment demonstrates Equinor‘s commitment to diversifying its portfolio beyond traditional fossil fuels.
The entry of these oil giants into the lithium market is seen as a clear indication of the industry’s maturity and long-term value.
Tim Goldsmith, Non-Executive Director of Pantera Minerals, noted: “When you see ExxonMobil and Rio Tinto entering the lithium sector, it tells you something — this industry is here to stay.
“Big players move in when they recognise long-term value, and they tend to buy assets at the bottom of the cycle.”
This trend of oil companies investing in lithium projects is partly due to the similarities between lithium extraction from brine and petroleum extraction.
Companies like ExxonMobil and Occidental Petroleum are leveraging their expertise in subsurface operations to gain a foothold in the lithium industry.
Despite the influx of major players, smaller companies like Pantera Minerals are finding ways to compete.
Pantera is leveraging its agility to secure prime lithium acreage in the Smackover region ahead of larger competitors.
This strategic move allows Pantera to remain a key contender in the increasingly competitive lithium market.
As the transition to clean energy accelerates, the oil and gas industry’s pivot towards lithium production represents a significant shift in the global energy landscape.
This move not only diversifies their portfolios but also positions these companies to play a crucial role in the future of electric vehicles and renewable energy storage.
