More than half 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 could increasingly serve as a bellwether of which companies may be best-positioned in a low-carbon economy.
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. 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. Eni aims to have net-zero upstream emissions by 2030 and net-zero emissions for the entire company by 2040. For the 13 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.
Exxon, Chevron and Saudi Aramco are among companies that haven't disclosed comprehensive carbon-transition strategies.
The refining and marketing industry could be slow to reduce operational carbon emissions, with few companies setting comprehensive transition strategies. Reliance Industries's net-zero target by 2035 suggests the company may be an exception. The company could exceed the IEA's SDS target of a 44% reduction in carbon intensity by 2030 vs. 2018, in our view. Reliance said it would replace transportation fuels with clean electricity and hydrogen, while enhancing its carbon capture and storage technologies, and examining methods to use CO2 as a feedstock.
Formosa Petrochemical, Indian Oil, Phillips 66 and Valero have yet to announce comprehensive carbon-transition strategies.
Woodside is the only exploration and production company 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 plans to be net-zero direct CO2 emissions by 2050. As a signatory to the World Bank's Zero Routine Flaring by 2030 initiative, the company is focused on reducing methane emissions and better energy efficiency, with increased use of offsets to reach the target. Santos, which targets net-zero operational emissions by 2050, could have higher absolute emissions and carbon intensity than Woodside in 2030, our analysis shows, suggesting a steeper reduction in 2030-50.
CNOOC, Devon Energy, EOG Resources and Occidental Petroleum haven't set comprehensive carbon-reduction strategies for their operational emissions.
