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A growing number of oil companies will boost their investments in low-carbon projects this year as they focus on lowering their carbon footprint, a survey from Norwegian DNV GL has suggested. A trend that is largely being driven by pressure from investors.
As much as 71 percent of respondents in the survey said they planned to either maintain their level of investment in low-carbon projects or increase it. This was up from 51 percent last year and comes despite the volatile oil price environment, the energy consultancy notes.
More than half of the 1,000 respondents also said their company was actively adapting to a less carbon-intensive industry environment. That was up from just 44 percent in 2018.
Unsurprisingly, with this new focus on cleaner energy production, fewer industry executives expect large-scale, expensive oil projects to be approved this year. Just 46 percent said they expected an increase in the number of approved capital-intensive projects, compared with as much as 67 percent in 2019.
At the same time, it seems that many in the industry have adapted to the post-2014 world with oil prices lower for longer, the survey also found. In fact, 46 percent of respondents said their companies would continue to turn in a profit even if the average oil price this year slipped below $50 a barrel.
Related: The Shipping Industry’s $1 Trillion Problem
Optimism about growth, however, has not risen. The survey found that only 66 percent of industry executives expected growth in oil and gas this year, down from 76 percent in 2019. Two-thirds is still an impressive majority of optimists, but the decline from 2019 does suggest that some pessimism is creeping in, too.
This is not least because of the increased emphasis on renewable energy and other climate change tackling tactics that have cast a shadow over the growth prospects of oil and gas, not just in the immediate term but in the long term as well. The energy industry’s new focus on low-carbon projects is proof enough they are taking the renewable challenge seriously.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.