* Oil majors announce $2.5 bln green investments
* Shell to create new energies division - internal document
* Investors increase pressure to lower carbon emissions
By Karolin Schaps
LONDON, May 18 (Reuters) - Europe's biggest oil companies,reeling from losing billions in the two-year oil market rout,are intensifying their push into renewable energy as they huntfor new sources of future revenue.
Shell, Eni, Total and Statoil have announced green energy investments with a combinedvalue of around $2.5 billion in recent weeks in a bid todiversify away from their core oil and gas markets.
French oil major Total, which has said it wants to become a"leader" in renewables and electricity storage within the next20 years, has so far made the biggest commitments among itsEuropean peers in green energy. Last week, it spent $1.1 billionto acquire energy storage maker Saft. Ithas also held a majority stake in solar panel manufacturerSunPower since 2011.
The deals are part of Total's stated ambition and to help todrive this, it will appoint an executive board member to leadits new gas, renewables and power division from Sept. 1.
"People innovate when they are against the wall," the chiefexecutive of French oil major Total, Patrick Pouyanne, toldreporters this week.
"You need to innovate, otherwise when you stick to yourposition you just cannot create money."
Shell, Europe's biggest oil company, is also setting up adedicated 'new energies' unit that will incorporate its wind andsolar as well as hydrogen and biofuel investments, an internalmemo seen by Reuters showed.
BP recently raised its forecast for global green powergeneration by 2035 to 15 percent.
However, the rush to invest in renewable energy is unlikelyto directly replace the value from untapped reserves.
"These companies have trillions of dollars of oil reserveson their books," said Ben Warren, head of energy andenvironmental finance at consultancy E&Y.
"But in ten years from now, if solar energy continues downits cost curve and battery technology means we can transportenergy wherever we need it, are those reserves ever going to getextracted?"
So far, the commitments to the sector remain small. Shell'spledge of $200 million for its new energies activities is lessthan one percent of the company's $30 billion annual capitalexpenditure programme.
"At the moment the investments in renewables by big oil issmall, relative to their total capital employed and given theearly stages they do not tend to generate significant returns,"said Rohan Murphy, co-manager of the Allianz Global Energy Fund,which invests in oil majors like Shell and Total.
Tom Ellacott, senior analyst at energy consultancy WoodMackenzie, said through renewable energy investments oil majorswill have to get used to utility-type returns.
These are typically in the single to low double digits.
This, as well as some past experiences, have made companiescautious about significant investments in renewables. BP, forinstance, closed its solar power unit in 2011 after it could notwithstand harsh competition from Chinese manufacturers,overcapacity and tumbling prices.
Despite such reservations, many investors are still keen tosee oil majors reduce climate-harming carbon emissions fromtheir asset base on the back of a global climate agreement tocurb emissions struck in Paris last year.
Institutional investors including pension funds,infrastructure funds and sovereign wealth funds will be able torespond to clients' growing requests for more socially consciousinvestments, they say.
"As a fund we've been under pressure from investors whodon't care whether renewables makes money," said Richard Hulf,co-manager of the Artemis Global Energy Fund, which holds sharesin major oil companies including Shell and Total. (Additional reporting by Bate Felix in Paris; editing by LinaSaigol and Jane Merriman)
