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How the "new energy order" will change the sector and where to invest
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Loading...According to JP Morgan, oil companies will soon find themselves in a dead end, although the price of oil is rising.
"The willingness of consumers and governments to switch to new and more environmentally friendly sources of energy has already begun to exert strong pressure on energy companies, and they will have to rethink their business very well," said Christyan Malek, head of EMEA oil and gas research in JP Morgan.
This will drastically increase capital expenditure and thus hit investors' returns strongly.
In the research note to investors published by JP earlier this week, the bank took a firm stance on the change in the sector. "Taking a green route and adapting to the new energy order, it is good not to talk about investing in the distant future, but to make them Now!"
According to the Bank's own environmental, social and governance model, carbon footprint reduction will require significantly more investment and earlier than many realize.
Pressure on companies is already affecting. British Petroleum, is targeting zero net growth in favor of green energy investment. The company has already invested over 200 million. pounds in one of the largest solar power plants in Europe. Shell has promised to reduce its carbon footprint by 20% by 2035, and by 50% by 2050.
Where to invest?
According to JP, BP, Shell and Repsol are best prepared for the transformation, while French Total and the Italian ENI remain in doubt.
The key to a positive outlook, according to the bank, is the companies offering long-term portfolio quality, a differentiated downstream position, lower energy emissions and a competitive overall return on shareholders.
Source: CNBC
Trader Petar Milanov Read more:
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