Topics in this section: - Winners and losers are clear in oil & gas carbon transition race - Gulf between transition strategies widens for integrated oils - Reliance stands out among refining peers with net-zero target - Occidental leads E&Ps with comprehensive net-zero targets
These analyses are by Bloomberg Intelligence Senior ESG Analyst Eric Kane.
Two-thirds of the 39 oil and gas companies we've analyzed have strategies to reduce operational greenhouse-gas emissions. Ambitions vary, but most don't meet the IEA's Sustainable Development Scenario guidance. The strategies and forecasts could increasingly serve as a bellwether of which companies may be best positioned in a low-carbon economy.
Gulf between transition strategies widens for integrated oils
European integrated oil and gas companies are enhancing their carbon-transition strategies, though a majority of their non-regional peers have been slow to address the issue. Equinor, Eni, Galp and Total could surpass the 44% reduction in operational emissions intensity the IEA suggests for its Sustainable Development Scenario by 2030, in our view. Equinor aims to have carbon neutral operations by 2030, and net-zero Scope 1, 2 and 3 emissions by 2050. For the 15 companies with carbon-reduction targets, their average carbon intensity -- million tonnes CO2e/invested capital plus depreciation ($/billion) -- could decline by almost 30% by 2030 and more than 60% by 2050.
Chevron, Petrobras and Saudi Aramco are among companies that haven't disclosed comprehensive carbon-transition strategies.
Reliance stands out among refining peers with net-zero target
The refining and marketing industry could be slow to reduce operational carbon emissions, with few companies setting comprehensive transition strategies. Reliance Industries and Valero may be exceptions, since they could exceed the IEA's SDS target of a 44% reduction in carbon intensity by 2030 vs. 2018, we believe. Reliance is aiming for net-zero by 2035 by replacing transportation fuels with clean electricity and hydrogen, enhancing its carbon capture and storage technologies, and looking at ways to use CO2 as a feedstock.
Formosa Petrochemical, Indian Oil and Phillips 66 have yet to announce comprehensive carbon-transition strategies.
Occidental leads E&Ps with comprehensive net-zero targets
Occidental is the only E&P in the peer set we expect to meet the IEA's 44% reduction in Scope 1 and 2 emissions intensity by 2030 from 2018. The company aims to be net zero for its Scope 1 and 2 emissions before 2040, and for its Scope 1, 2 and 3 emissions by 2050. Woodside and Santos have also set ambitious targets. Woodside plans to have net-zero direct CO2 emissions by 2050, and is focused on limiting methane, energy efficiency and more use of offsets to reach the target. Santos targets net-zero operational emissions by 2050.
CNOOC and Devon Energy are the only companies in the exploration and production set that haven't set comprehensive carbon-reduction strategies for their operational emissions.
