Oil and gas majors are decarbonising their businesses

Significance

While the US oil majors are adopting strategies primarily based on decarbonising oil and gas production, European companies are also developing new businesses designed to compensate for future demand-led reductions in oil and gas revenues. The European majors’ entry into the power sector and renewable energy markets brings new, well-financed and technologically proficient competitors into a sector made up predominantly of utilities and smaller developers.

Impacts

• Hydrocarbon majors' capital spending on renewables will rise over the next decade.
• The oil majors will continue to buy into promising new energy transition technologies.
• These companies will invest in oil output and protect their legacy assets, but their valuations will be less driven by their oil reserves.