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  • Low-carbon investing by the oil and gas industry remained strong in 2020, despite Covid-19, totaling $24 billion, again signaling lasting shifts as the transition gathers pace. In this latest Low-Carbon Investment Tracker, our first full-2020 data set of announced or approved projects shows firms focused on fewer but larger deals, indicating greater selectivity.
    Tue, Jan 19, 2021
  • For Saudi Arabia, the energy transition—and a growing consensus that oil demand will peak next decade, if not sooner—poses an existential threat. The kingdom will remain a competitive oil producer, but the prospect of sustained low prices threatens its oil revenue dependent economic and political model. Riyadh is taking steps to address critical vulnerabilities through Vision 2030, launched in 2016 by Crown Prince Mohammed bin Salman. Yet the task remains daunting, and questions linger over the state’s capacity to deliver. Saudi Aramco’s role in helping navigate the transition is unclear, and the NOC itself is vulnerable to transition risks, despite its resilient portfolio. It has not yet articulated an energy transition strategy publicly and we expect it will face growing pressure to do so in 2021.
    Thu, Jan 7, 2021
  • Our latest ESG Climate Risk Benchmark assessment shows how, under rapidly rising investor pressures, companies have stepped up action, with average scores improving by 2 points out of 40. But progress has been uneven, concentrated among a handful of firms. Our benchmark, now covering 26 companies, continues to demonstrate that firms under the greatest investor pressure tend to perform best, with Total rising to first overall. There is a growing divergence between top-tiered firms—mostly European majors—and NOCs, which account for eight of the bottom 10 positions. BP and Oxy have made standout gains, for instance, while many NOCs have made few changes. Investor attention is now shifting to Emissions Targets and Carbon Performance. Several European players and Oxy have set net-zero Scope 3 (end-use) ambitions, but most firms in the US and elsewhere remain focused on more modest Scope 1 and 2 goals—if they have set any at all. In 2021, we expect companies across the benchmark, including NOCs, to face growing pressure to set net-zero targets at least for Scopes 1 and 2—and in the end possibly Scope 3 as well.
    Thu, Dec 17, 2020
  • The energy transition was gaining steam prior to the Covid-19 crisis—and rising market, policy and competitive pressures will further fuel the shift to a low-carbon energy system as we emerge from the pandemic. Our core Accelerate scenario sees the transition continuing to gather momentum this decade, driven by mounting oil and gas demand concerns, surging green policy priorities, escalating investor demands and falling clean energy costs. Risks are weighted toward our even faster Boost scenario, which assumes a virtuous cycle of robust policy support and technological progress arising, bringing forward inflection points for key emerging technologies like CCS and hydrogen. These dynamics are spurring ever more divergent corporate responses. European majors have dramatically stepped up their activity and will continue to advance transformational strategies. We expect to see increased investor attention on US majors—and even NOCs—that are slow to lay out emissions-reduction goals and adaptation strategies in the face of these rapidly growing pressures.
    Tue, Oct 20, 2020
  • Data accompanying the September 2020 Low-Carbon Investment Tracker quarterly report.
    Sun, Sep 13, 2020
  • We are pleased to introduce our new Low-Carbon Investment Tracker, with focus in this brief initial report on BP, Chevron, Eni, Equinor, Exxon Mobil, Repsol, Shell and Total. European majors are driving the recent surge in investment. Since 2015, Equinor, Shell, Total and Repsol account for 94% of announced investments in this group. US supermajors Chevron and Exxon make up just 1%, highlighting their divergent energy transition strategies. Priorities differ widely among European firms as well. Equinor tops the list of announced investments by total value, while Shell and Total are pursuing the most diversified strategies. Major deals will likely slow this year due to the coronavirus pandemic, but we expect activity to rebound as the crisis subsides. We expect the divergence in low-carbon investment priorities to widen as European companies seek to meet ambitious net-zero targets and US majors remain reluctant to diversify away from their core business models.
    Mon, Apr 27, 2020
  • Faced with rising climate-related investor pressures, oil and gas companies across the industry need to understand: 1. What investors want; and 2. How companies are responding versus their peers. Our ESG Climate Risk Benchmark—a core deliverable of our new Energy Transition Service—helps answer both questions. European firms top our ranking, as they seek to address acute shareholder demands. NOCs are clustered at the bottom—a reflection of the differing priorities of their governments. US companies score consistently below their European competitors, with key independents besting the US supermajors. We expect that investor pressures will only grow, forcing companies across the spectrum to take further concrete action in the near term. This benchmark is part of an integrated set of corporate offerings, alongside our forthcoming Vulnerability Index and our Low-Carbon Investment Tracker.
    Sun, Apr 19, 2020
  • The energy transition has become the leading strategic issue facing the oil and gas industry. But the coronavirus crisis and its dramatic economic fallout threaten to impact the timing and trajectory of the transition and reshape the priorities of companies now battling for survival. The economic impact of draconian virus containment measures is causing sharp falls in energy use, potentially heralding lasting demand destruction in some segments, as the result of an extended downturn or permanent behavior shifts. However, the wider impact of the crisis, including low energy prices, could undermine energy sector investment, especially if the global economic slowdown also triggers a financial crisis. Hopes that the pandemic creates an opening for global green growth face major headwinds, as governments focus on pressing near-term priorities, while the global climate policy process is paused. Oil and gas companies have turned to more urgent concerns, but will not be able to sideline the energy transition altogether. Key stakeholders, including ESG-focused investors, are likely to ensure it remains a strategic priority, and companies may, despite cuts, continue to target decarbonization investment and objectives.
    Sun, Apr 5, 2020
  • The oil market is just now coming to grips with the severity of near-term demand destruction as caution over the coronavirus pandemic forces billions of people to simply stay at home. Our latest figures call for a year-on-year decline of ~7 million barrels per day in Q2’20, following a ~5 million b/d fall to close out the current quarter. Rising unemployment, the shutdown of businesses and a hit to key industries will likely persist well into the second half of 2020: Q3 oil demand will also be down year-on-year, but there is an opportunity for consumption to turn positive in Q4. We also anticipate key signposts in the second half of the year that could shape the longer-term demand outlook, such as more permanent downshifts in consumption for air travel, but offset by a potential uplift in road transport as well as the petrochemicals segment.
    Thu, Mar 26, 2020
  • A revenue crash this year will separate the weak from the strong, but none of the Opec-plus states are immune to a price war. Energy Intelligence has adjusted our external break-even oil prices, and the average for 2020 is $63 per barrel. Russia and most of the Mideast Gulf states still have ample savings and room to borrow. Saudi Arabia can cover its deficits by draining foreign exchange reserves and by borrowing, but it could burn its currency reserves at an ever-faster rate as revenues fall and growth slows. Compared with the Gulf states, Russia is more resilient to lower oil prices, thanks to a flexible exchange rate as well as large currency reserves. If prices remain below $40/bbl, countries including Algeria, Iran, Oman, Iraq and Angola are all at risk of balance of payments or debt crises.
    Tue, Mar 10, 2020
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AN INDUSTRY REDEFINED: ENERGY IN AN EVOLVING WORLD