The pace of energy transition varies considerably among 15 leading international oil and gas companies according to a new report commissioned by research consultancy CMS,reports Brian Davis.The European majors(especially Shell and Repsol)have made far more progress than their American counterparts(such as Chevron,ExxonMobil and ConocoPhillips),while national oil companies(such as Pemex,Lukoil and CNPC)are more constrained in their ability to diversify,often due to more stringent government policies and regulatory frameworks.In 2018,the majors sampled invested $6.6bn in renewables,equivalent to roughly 3% of their combined capex budges.Typically,companies with larger oil reserves were less diversified in renewable energy,says the report.The oil and gas majors commonly focus on renewable investment in wind and solartechnologies,while very few have stakes in hydroelectric and geothermal energy sources.Key drivers for the transition were the declining costs of renewables,investor and customer pressure(which threatens to damage corporate brands)and government regulations,alongside a new risk allocation strategy,given oil price volatility and the strong geopolitical risk related to traditional oil and gas production.
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