Net Zero Industry Tracker 2024 Oil and Gas

Capital The oil and gas industry will need an estimated investment of $1.1 trillion by 2050.563 The majority of this investment must be invested by the sector (around 60%), and the rest will need to come from the ecosystem to build the enabling infrastructure. Oil and gas decarbonization requires a scale-up of methane abatement, clean hydrogen, CCUS and clean power. It is projected that out of the total additional investment required, around $780 billion is for electrification and efficiency, $110 billion is for CCUS, $102 billion is for methane reduction, $83 billion is for clean hydrogen and $70 billion is for flaring reduction.564 Investing in electrification and efforts to reduce methane emissions and flaring can lead to new revenue opportunities by optimizing the use of natural gas and minimizing waste. These strategies could help companies quickly recover their initial investments. By 2030, these measures could provide over 200 bcm of additional natural gas. Even in a low gas price environment, these gas sales might generate around $30 billion in revenue each year.565 $1.1 trillion required in investment by 2050Investments by the sector (around 59% of investments)Enabled by the ecosystem (around 41% of total investments) Methane abatement and flaring Electrification CCUS Clean hydrogenInvest in technologies like drones to quickly detect methane leaks Invest in infrastructure that allows for gas capture and reinjection Transition to electric-driven equipment Switch to renewable feedstock sources Provide low-carbon power/renewable grid Invest in CCUS technology Build CO2 capture plants Switch to hydrogen use in production process Build hydrogen capacity for use in productionWork with regulators to create supportive methane abatement policies Provide a low-carbon power/renewable grid Increase funding for R&D of advanced CCUS technologies Establish clear regulatory frameworks that facilitate CCUS deployment Establish policies that support clean hydrogen production and useInvestments required by the sector and enabled by the ecosystem FIGURE 70OIL AND GAS With the oil and gas industry’s profit margin of 15%566 (which is higher than all other sectors in scope), the business case for investing in decarbonization initiatives is strong. This profitability allows companies to allocate significant funds towards clean technologies and infrastructure development. Many oil and gas firms are already committing substantial portions of their budgets to sustainable energy projects, reflecting a strategic shift towards greener practices. However, the risk profile of investments in decarbonization varies significantly compared to traditional investments in oil and gas production, making it complicated to invest in decarbonization. Moreover, investments in national oil companies (NOCs) are driven by government budgets. Net-Zero Industry Tracker: 2024 Edition 11