Topics in this section: - Oil and gas looks within to lower its carbon-intensity levels - Integrated oils lead on historic emissions reduction - Marathon leads refiners on CO2 reductions - Devon lags behind in decarbonizing among E&Ps
These analyses are by Bloomberg Intelligence Senior ESG Analyst Eric Kane.
As the transition in carbon progresses and increasingly rewards efficiency, oil and gas companies are reducing their operational intensities, with 22 of the 39 companies analyzed showing carbon-intensity reductions during the latest five-year period. The refining and marketing segment trails others with the highest average intensity.
Integrated oils lead on historic emissions reduction
A higher percentage of integrated oil and gas companies are reducing their operational carbon intensity -- million tonnes CO2e/invested capital plus depreciation ($/billion) -- than others in the industry, our analysis suggests. In the latest five-year period, 15 out of 23 companies reduced emissions intensity, while four experienced a gain. Four didn't provide enough data for comparison. Rosneft, OMV and PTT achieved the most significant reductions, while Oil & Natural Gas, Imperial Oil, Gazprom and Eni reported increases. Oil & Natural Gas and Gazprom are among eight integrated companies yet to set comprehensive targets to reduce carbon emissions.
OMV aims to have net-zero operations by 2050, and seeks to lower its upstream carbon intensity by more than 60% and refining intensity 20% by 2025 from 2010 levels.
Marathon leads refiners on CO2 reductions
Over the latest five-year period, the average combined Scope 1 and 2 carbon intensity -- million tonnes CO2e/invested capital plus depreciation ($/billion) -- for six refining and marketing companies we analyzed decreased by more than 20%. Marathon led peers with a reduction of more than 50%, while Indian Oil was the only company to see an increase. Marathon reduced its intensity by diversifying its portfolio to include less carbon-intensive operations, including biofuels, while enhancing natural-gas recovery and processing. The company plans to reduce Scope 1 and 2 emissions per barrel of oil equivalent processed 50% by 2025 from 2019 levels.
Valero and ENEOS don't provide five years of greenhouse gas emissions data, and were therefore excluded from industry average calculations.
Devon lags behind in decarbonizing among E&Ps
Of the eight exploration and production companies we analyzed, just two lowered CO2 emissions intensity -- million tonnes CO2e/invested capital plus depreciation ($ billion) -- in the latest five-year period. This suggests the industry is slow to decarbonize. Devon Energy trails all peers with a 150% increase in 2014-18. Occidental, which has the group's most ambitious carbon strategy, had a 9% gain in intensity in the same period. The company plans to be net-zero for its Scope 1 and 2 emissions by 2040, and for Scope 1, 2 and 3 by 2050. Woodside, which aims to achieve net-zero direct emissions by 2050, led the peer set, reducing emissions by 35%.
EOG Resources and CNOOC don't provide enough historical emissions data and were excluded from the analysis.
