The new world order of the oil and gas industry surrounds a low-carbon and/or new energy focused business model. And, as capital allocation for these projects grew significantly in 2021, this implies favorable economics for low-carbon producers in 2022.
Nicholas Fulford, the senior director of energy transition for petroleum consulting firm GaffneyCline, said net-zero commitments from all supermajors and most NOCs paired the introduction of new tax credit incentives indicates a new horizon for oil and gas portfolios going into 2022.
“We’ve seen carbon capture and CCUS projects come to age and there is a real following now within the investment community and a real belief in that technology going forward,” Fulford said.
He continued, “There is a level of sophistication around the various benefits and incentives that have been introduced globally to encourage low-carbon investment. Now, some of the more sophisticated players are finding that by mixing and matching a tax relief and a traded commodity, it’s possible now to build up a real kind of revenue base for low-carbon technologies.”
Jump to a topic:
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Low-carbon trends of 2021 (0:33)
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Legislation and tax incentives (3:15)
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Advice for new players (4:59)
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Capital allocation (8:28)
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Global implications (10:40)
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Predictions (12:07)
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Oil and gas hurdles (13:30)
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