Beyond Fossil Fuels: State Oil Producers Reach for Net Zero - Bloomberg
Petroleos Mexicanos left investors with more questions than answers after it announced in late July that it would be disclosing its greenhouse gas emissions on a more regular basis — then refused to discuss why they’d soared by double-digits from April to June, compared to a year ago.
The moment was awkward to say the least, but analysts also welcomed it as a first wobbly step in a segment of the fossil fuel industry that’s still refining its green marketing strategy.
Pemex, as the Mexican oil giant is known, is among a growing number of national oil companies facing pressure from foreign shareholders and investors to track carbon emissions and reduce them. Unlike their privately held peers, these oil companies’ main shareholder is the state, putting some riskier or more experimental options out of reach.
State oil companies “have less flexibility to make investments or strategic changes in their business,” said Jonathan Wood, deputy global research director for Control Risks, a global risk consultancy group. They can’t simply sell their high-emitting assets, for instance. “Their mandate is to maximize government revenues and ensure a stable supply of affordable, domestic energy. And they are often working in markets where there are price controls or other measures designed to achieve those outcomes, which is very different than what international oil companies face,” said Wood.
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