Could clean energy be the winner in the oil price war?

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The Saudi-Russia oil price war combined with the destruction of demand by the corona virus pandemic has once again thrown the oil and gas sector into turmoil. Cuts to all discretionary spend are expected across the sector, as companies go back to the survival mode in a US$35/bbl oil price environment. But how will this impact the embryonic energy transition efforts by oil and gas companies? We look at the effect of budget cuts on oil and gas companies' carbon commitments and global growth in renewables. We analyse what the recent sharp drop in oil prices means for returns from oil and gas projects and how they compare to returns from investment in renewables.

Table of contents

    • The oil price collapse throws O&G sector’s carbon commitments into doubt
    • ...but what does it mean for investment in renewables?
    • Sustained low oil prices will decimate returns from new oil and gas projects
    • At US$35/bbl renewable investments easily compete with O&G projects
    • Is there a silver lining to the oil price collapse?

Tables and charts

This report includes 6 images and tables including:

  • O&G sector’s response to the energy transition pressures
  • Operational solar and wind renewable capacity
  • Global wind and solar cumulative installations
  • Pre-FID IRRs at $35/bbl and $60/bbl scenarios
  • Delta in produced reserves at $35/bbl and $60/bbl
  • Typical energy project IRRs

What's included

This report contains:

  • Document

    Could clean energy be the winner in the oil price war?

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