The Key Role of National Companies in the Climate Debate
In the climate debate, the focus is on the Western majors, but the fossil empire is largely controlled by national companies.
| Sectors | Gas, Natural Gas, Oil |
|---|---|
| Themes | Policy & Geopolitics, Energy Security |
The debate on climate change has long focused on the Western “majors”, often accused of perpetuating the world’s dependence on hydrocarbons. However, a recent study by the International Energy Agency (IEA) reveals that these majors hold less than 13% of the world’s oil and gas production and reserves. In reality, it is the national oil companies (NOCs) that dominate the market, controlling more than half the world’s production and nearly 60% of reserves.
The Importance of NOCs in the Energy Transition
COP28 in Dubai highlighted the importance of these NOCs. They are unique in that they are wholly or majority owned by producer states. The IEA stresses that, like the seven supermajors, these national companies have a key role to play in efforts to achieve carbon neutrality by 2050. It is crucial for all companies in the sector, not just the majors, to reduce the greenhouse gas emissions resulting from their operations.
The Challenge of Transparency and Climate Action
Despite their major influence, the NOCs often remain opaque and discreet when it comes to climate issues. Unlike the majors, few of them have announced climate targets. Exceptions include Aramco, Adnoc, PetroChina or Petrobras, aiming to make their operations carbon neutral by 2045 or 2050. This discretion is partly explained by the nature of their shareholding: as the State is the main shareholder, they are not subject to the same environmental requirements as listed companies.
Towards a Diversified and Sustainable Future
The predicted decline in fossil fuels poses an additional challenge for these companies and their countries. Economic diversification is becoming an urgent necessity. Giants like Aramco and Adnoc have the potential to set the pace in this transition. Their influence can extend far beyond hydrocarbon production, shaping energy transition strategies on a global scale.
The dominance of NOCs in the hydrocarbon industry raises critical questions about resource management, transparency and contribution to climate change. Their role in the energy transition is not only central but also complex, requiring a balance between economic, political and environmental imperatives.
