THE TOUGH MAKEOVER

How oil giants plan to innovate for emission reduction and invest in clean energy

- NEVIN JOHN

At the FII Investment Institute Conference in June last year, Reliance Industries Chairman Mukesh Ambani mooted an idea of using carbon dioxide (CO2) as a raw material rather than a liability. Prince Abdulaziz bin Salman al-Saud, Minister of Energy of Saudi Arabia, and Patrick Pauyanne, CEO of Total, were also present at the conference. “If we take a clean sheet of paper and adopt technologies whereby we can complete the energy cycle, we can adopt new technologies, particularly biochemical photosynthesis,” he said. He then went on to speak about carbon recycling and completing the carbon cycle, which was disturbed by the industrial revolution. “There is a need to provide efficient, clean and affordable energy. And we have to do it in a responsible way. That’s the business,” he said.

Ambani is not the only one thinking on those lines. In fact, global oil giants, working across the value chain, are transforming the way they treat fossil fuel and do business. Just after taking over as British oil giant BP Plc’s Chief Executive in February 2020, Bernard Looney announced that the company would dramatically shift the way it did business. He said BP Plc would spend more on clean energy and less on fossil fuels. He announced net-zero greenhouse gas emissions by 2050.

Looney’s call for change was well received in the oil and gas industry. Within a few months, Total and Royal Dutch Shell announced plans to reach net-zero emissions by 2050, by increasing spending on low-carbon energy sources like wind, solar and biofuels. US giants ExxonMobil and Chevron also announced goals to cut emissions.