We feature 13 EM oil & gas company climate strategies, including the world’s largest oil and natural gas producers, as well as Asia’s largest hydrogen producer, among others: CNOOC, Ecopetrol, Gazprom, Lukoil, Novatek, ONGC, PetroChina, Petrobras, PTTEP, Reliance Industries, Rosneft, Saudi Aramco and Sinopec. 

Climate has been rising up the agenda among EM producers. Building on our extensive climate-related work on European and US oil majors, we’ve noticed a ramp up in EM company climate strategies and data disclosure in line with broader ESG/energy transition tends; but some gaps remain (e.g. full scope 3 emissions disclosure isn’t as well practised in EM). We recently held an ESG Insight event  (12 September) on the topic of Russia’s own energy transition – a replay is available. 

Fewer transformational climate strategies; often focus is on upstream CO2 efficiency and growing gas. EM producers are more likely to be part of industry initiatives (e.g. OGCI) than have long-term climate strategies. Emissions reduction efforts tend to focus on upstream carbon efficiencies and increasing gas in production mix, with a limited current role for renewable / new energy sources, or for addressing scope 3 emissions from their hydrocarbon sales. 

Oil will not disappear in ‘net zero’ world and majority of global reserves sit in EM, much of it among the cheapest. In the context of discussions around a potential future global ‘net zero’ push, we note that: i) while future global oil demand would be structurally lower, it would still be material; and ii) EM oil & gas reserves are not only very large, but also among the lowest upstream CO2 and costs per barrel; potentially placing such operators well for a lower-carbon future. 

EM producers also often form a part of national climate aims as well as state finances. EM oil & gas production is often more geographically concentrated in ‘home’ countries, meaning operators can play an important role in nations’ climate goals. Companies that are custodians of national resources also have more common material state ownership and have a bearing on state finances. 

Macro winds could spell future changes in both supply and demand. As the world’s largest energy importer, China’s announcement of its intention to reach net carbon neutrality by 2060 could spell significant change for not only Chinese producers (we feature 3 in this report) but oil & gas exporters to the Chinese market. The upcoming Presidential election also represents a potential directional change in the world’s largest producing nation of both oil and gas – the US.