European oil majors better prepared for energy transition than US, Chinese counterparts

(EurActiv, 12 Nov 2018) Oil majors are lagging behind when it comes to preparing for the low-carbon energy transition, according to a new report by financial watchdog CDP, which nonetheless praised BP, Eni, Equinor, Total, Repsol and Shell for taking the industry’s lead.

CDP, the environmental research and financial watchdog, issued a report on Monday (12 November) ranking the world’s 24 largest publicly listed oil and gas companies against their readiness to adjust to the low-carbon transition.

With an average of only 1.3% of capital expenditure spent on wind, solar or carbon capture and storage (CCS), the industry does pretty poorly overall, according to the report.

China’s oil giant CNOOC, Russia’s Rosneft and Marathon Oil in the US feature at the bottom of the league, which ranked companies by their ability to manage the four key transition risks defined in the Task Force on Climate-related Financial Disclosures (TCFD), chaired by Michael Bloomberg.

Regional split

For CDP, a “regional split” has become apparent, with Chinese, Russian and US firms lagging behind.

European oil majors stood out, with investments in low-carbon technologies reaching up to 7% of their total expenditure.

The percentage may look small. But Luke Fletcher, a senior analyst at CDP, said it has to be seen in relation to the industry’s massive size. Shell, for instance, has an annual capital expenditure of 25-30 billion dollars and plans to invest between 1 and 2 billion in low-carbon technologies over the coming years.

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EurActiv, 12 Nov 2018: European oil majors better prepared for energy transition than US, Chinese counterparts