CMS study shows oil and gas majors plugging billions into renewables

CMS study shows oil and gas majors plugging billions into renewables

Munir Hassan

As the world’s largest oil and gas companies face mounting pressure to address the climate emergency, new research from CMS reveals that a significant majority of the sample – equivalent to half of worldwide production – is adapting their strategy to invest in a more diverse energy portfolio.

CMS worked with Capital Economics to examine the energy transition strategies of 15 of the world’s largest oil and gas companies to assess how far they are committed to new and alternative energy. The sample invested USD $6.6 billion into renewables, carbon capture and storage in 2018.

Using international energy agency scenarios, CMS presents two projections for future energy demand. It identifies that $209 billion could be invested by oil and gas majors by 2030 – an increase from three per cent to 10 per cent of capex budgets – if policies and commitments to the energy transition ramp up.

  • Scenario 1: If existing policies continue, our sample could increase their annual investment into renewables and carbon capture from $7 billion currently to $10 billion by 2030 – totaling $100 billion over the period.
  • Scenario 2: In a rapid energy transformation, majors could invest $209 billion between 2019 and 2030. The annual investment figure could rise to $31 billion by 2030 – equivalent to 10 per cent of their total combined annual capital expenditure. Majors’ share of all investment in renewables would rise from the current 2.3 per cent to 5.9 per cent by 2030.

Munir Hassan, head of CMS energy group, said: “Oil and gas majors understand that they need to transform their business models as part of a global shift towards a more sustainable future. Both of our future energy scenarios assume a significant change in approach over the next decade.

“Energy transition now dominates conversations at board level. Whether it is de-carbonising their own operations or investing in alternative energy, the transition will happen. It will take time, but time is something that is in short supply.”

Download the report here

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