AFP, Paris :
Thirty percent of investments planned by oil and gas majors over the next decade could be wasted if the world economy retools to cap global warming at two degrees Celsius, researchers warned Wednesday.
The 2C (3.6 degree Fahrenheit) target is the cornerstone of the 196-nation Paris Agreement, inked in 2015.
Projects worth $2.3 trillion (two trillion euros) could become unprofitable as energy shifts toward renewables and if fossil fuel prices stagnate, according to an analysis of investment budgets for 69 publically traded oil and gas companies.
Some players will be more exposed than others, said the report, “Two degrees of separation: Transition risk for upstream oil and gas in a low-carbon world.”
Up to 50 percent of ExxonMobil’s proposed capital expenditure to 2025, for example, is allocated to uneconomical projects likely to disappoint shareholders, the researchers concluded.
Shell, Chevron, Total and Eni were found to have put 30 to 40 percent of future spending at risk, about average for the companies examined.
At the other end of the scale, 14 companies-including state-owned giant Saudi Aramco-were seen as well-aligned with the 2C scenario.
“This report is a real game-changer for the future of corporate-investor engagement,” said Nathan Fabian, director of policy & research at PRI, a UN-backed network of investors who oversee $62 trillion (56 trillion euros) in assets.
Thirty percent of investments planned by oil and gas majors over the next decade could be wasted if the world economy retools to cap global warming at two degrees Celsius, researchers warned Wednesday.
The 2C (3.6 degree Fahrenheit) target is the cornerstone of the 196-nation Paris Agreement, inked in 2015.
Projects worth $2.3 trillion (two trillion euros) could become unprofitable as energy shifts toward renewables and if fossil fuel prices stagnate, according to an analysis of investment budgets for 69 publically traded oil and gas companies.
Some players will be more exposed than others, said the report, “Two degrees of separation: Transition risk for upstream oil and gas in a low-carbon world.”
Up to 50 percent of ExxonMobil’s proposed capital expenditure to 2025, for example, is allocated to uneconomical projects likely to disappoint shareholders, the researchers concluded.
Shell, Chevron, Total and Eni were found to have put 30 to 40 percent of future spending at risk, about average for the companies examined.
At the other end of the scale, 14 companies-including state-owned giant Saudi Aramco-were seen as well-aligned with the 2C scenario.
“This report is a real game-changer for the future of corporate-investor engagement,” said Nathan Fabian, director of policy & research at PRI, a UN-backed network of investors who oversee $62 trillion (56 trillion euros) in assets.
