degree of heat1972
According to a report by World Petroleum on August 25, PEMEX announced at the end of July that it would pay more attention to regularly disclosing its greenhouse gas emissions, but it left investors with more questions than answers. The company subsequently declined to discuss why its greenhouse gas emissions soared by double digits year-on-year from April to June.
More and more state-owned oil companies are facing pressure from foreign shareholders and investors to track and reduce carbon emissions, and Petro Mexico is one of them. Unlike their privately held counterparts, the main shareholder of these oil companies is the government, which makes some riskier or more experimental options out of reach.
Jonathan Wood, deputy director of global research at Global Risk Consulting Group Control Risks, said that state-owned oil companies have less flexibility in making investments or adjusting business strategies. For example, they cannot simply sell high-emission assets. Their task is to maximize government revenue and ensure a stable supply of cheap domestic energy. They usually work in markets where there are price controls or other measures designed to achieve these results, which is very different from the situation faced by international oil companies.
The challenges faced by various drilling companies are not the same, some of which are far ahead of others in achieving sustainable development goals. Although each oil company has its own unique driving factors, the behavior of most companies will depend on the government's economic and political strategy.
European national energy companies, such as Norway’s Equinor ASA, are among the best in terms of sustainable development due to Europe’s wealth and ambitious climate commitments. At the same time, Saudi Aramco, the national oil company of Saudi Arabia, has accelerated its pace since its initial public offering (IPO) two years ago. The company is not only facing pressure from outside investors, but also promoted by Saudi Crown Prince Mohammed bin Salman. His Vision 2030 reform plan aims to diversify the economy and prepare for the post-oil era.
Even so, Saudi Aramco still lags behind the pace of development of international oil giants. A Bloomberg survey showed that at the beginning of this year, the company underreported its emissions by 50%. Although the company later stated that it would improve the report, in March of this year, it admitted that two wholly owned assets were not included in the emissions statistics for its 2020 annual report. Saudi Aramco insists on disclosing only the emissions of assets it controls, excluding multiple joint ventures in oil refineries and chemical plants.
At the same time, in poorer areas, government-controlled oil producers are facing greater pressure and need to strike a balance between sustainable development goals and national economic needs. In rare cases, such as Colombia's recent decision to sell a power transmission company to its state-owned drilling company Ecopetrol, and the company's goal is to achieve net zero emissions by 2050, these two needs may occur at the same time.
There is no doubt that this is due to financial considerations. Colombia’s Minister of Finance from 2012 to 2018 and now a senior researcher at Columbia University’s Center for Global Energy Policy, Mauricio Cardenas, said that this was promoted by the Ministry of Finance because it needed to ensure additional revenue to reduce the fiscal deficit soared during the epidemic. If things are done in the right way, it may actually help Ecopetrol achieve its net zero goal.
More commonly, the economies of developing countries and the sustainable development goals are not so synergistic. For example, the refinery of Petro Mexico lacks the technology to extract clean fuel from the sludge left over from the initial conversion of crude oil to gasoline, thus increasing the production of highly polluting fuel oil. The more gasoline the refineries in this country produce, the cleaner fuel they need.
Mexican Energy Minister Rocio Nahle said in an interview: “Of course we are adding fuel. Although we plan to phase out production, I am not worried. I have reconfigured several refineries in central Mexico and will be completed in 2023.”
With the International Maritime Organization (International Maritime Organization) demanding the use of less polluting fuel, Mexico's National Petroleum Corporation has been selling fuel oil cheaply to the national utility company, the Commission Federal de Electricidad, for burning in its factories. The Federal Electricity Commission purchases approximately 45,000 barrels of fuel oil from Pemex every day. According to BloombergNEF calculations, converting power plants from natural gas to fuel will generate 16% more carbon dioxide. Similarly, in Brazil, Petrobras increased its fuel oil sales due to the shortage of hydropower due to drought.
Petronas has also absorbed more oil assets from international giants that are spinning off their fossil fuel business. For example, Petro Mexico plans to acquire the Deer Park refinery in Texas from Royal Dutch Shell, which in May The plan was announced. However, Wood pointed out that if they are forced to respond to environmental regulations in foreign jurisdictions, it may have a knock-on effect on their domestic operations.
He added: “If you have to report greenhouse gas emissions for a large oil refinery headquartered in the United States, this requires comprehensive institutional management capabilities and strategic development knowledge. For many such companies, the next step is more than just getting Know what the goals should be, but how to quantify and measure these goals and actually improve performance."
The Mexican National Petroleum Company reported that two offshore platform explosions occurred within a few months. The most recent one occurred on Sunday, killing 5 people, and reducing production by about a quarter of its conventional output. The company is being increasingly affected. More review. The explosion in July earlier caused a fire in the Gulf of Mexico and attracted the attention of the international community. John Padilla, managing director of energy consulting firm IPD Latin America, said: "In their quarterly report, to show that they are dealing with ESG issues, it needs more than a slide report."
Analysts said that the main way to improve the carbon footprint of state-owned oil companies is for the international community to encourage developing countries to reduce emissions. Rystad Energy's data shows that the oil supply of state-owned oil producers accounts for more than half of the global oil supply, and this figure may reach 65% by 2050. This is particularly important to consider. According to a report by Bloomberg Opinion in September, the emissions of unlisted state-owned fossil fuel companies accounted for about 20% of global emissions, and another 19% of emissions came from listed state-owned oil producers.
Cardenas believes that this incentive can take the form of financing. Unless their government is fully committed to emission reduction targets. The only reason these companies really take a tough stance is that financing has become a problem.
