Report warns all oil and gas firms face massive stranded asset risk
10 Oct, 2020 11:21
source: Singularity Financial
Singularity Financial Hong Kong October 10, 2020 – Latest study from Carbon Tracker shows that while US firms are particularly exposed, all oil and gas firms would face massive stranded asset risk in the event of a successful energy transition.
US companies are lagging way behind their European rivals in adapting their business models to a low-carbon future which would see demand for fossil fuels drastically reduced, a new study released today by Carbon Tracker demonstrates.
But while some oil and gas companies are far less prepared for the clean energy transition than others, all of the world’s biggest oil majors are operating with project portfolios that expose them to massive stranded asset risk, the report argues.
Titled Fault Lines: How diverging oil and gas company strategies link to stranded asset risk, the study warns that fossil fuel demand would have to plummet to meet agreed climate targets and, consequently, only the lowest cost oil projects would deliver reliable returns. Reiterating many of its previous studies, the think tank warns that most of the world’s oil majors are continuing to approve investments in projects that are inconsistent with the goals of the Paris Agreement.