CMS worked with Capital Economics to examine the energy transition strategies of 15 of the world’s largest oil and gas companies to assess how far they are committed to new and alternative energy. The sample invested USD $6.6 billion into renewables, carbon capture and storage in 2018.

Using international energy agency scenarios, CMS has presented two projections for future energy demand. It identifies that $209bn could be invested by oil and gas majors by 2030 – an increase from 3% to 10% of capex budgets – if policies and commitments to the energy transition ramp up.

• Scenario 1: If existing policies continue, our sample could increase their annual investment into renewables and carbon capture from $7bn currently to $10bn by 2030 – totalling $100bn over the period.
• Scenario 2: In a rapid energy transformation, majors could invest $209bn between 2019 and 2030. The annual investment figure could rise to $31bn by 2030 – equivalent to 10% of their total combined annual capital expenditure. Majors’ share of all investment in renewables would rise from the current 2.3% to 5.9% by 2030.

Munir Hassan

Munir Hassan, head of CMS energy group, said: “Oil and gas majors understand that they need to transform their business models as part of a global shift towards a more sustainable future. Both of our future energy scenarios assume a significant change in approach over the next decade.

“Energy transition now dominates conversations at board level. Whether it is de-carbonising their own operations or investing in alternative energy, the transition will happen. It will take time, but time is something that is in short supply.”

Download the report here.