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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
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  • Sep 24, 2021 11:40 am GMT
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Oil and gas companies are set to ramp up production in the Arctic by 20 per cent in the next five years

THE KEY PLAYERS

  • The main Arctic expansionists – Gazprom, Total and ConocoPhillips – are backed by hundreds of billions of pounds from dozens of City banks
  • £230 billion of loans and underwriting from commercial banks to Arctic oil and gas between 2016 and 2020
  • JPMorgan Chase was the biggest investor with $18.6 billion, followed by Barclays ($13.2 billion), Citigroup ($12.2  billion) and BNP Paribas ($11.8 billion).
  • Investors are further holding around $272 billion in Arctic fossil developers with BlackRock ($28.5 billion), Vanguard ($21.6 billion) and Amundi ($12.9 billion) leading the pack, all without Arctic exclusion policies.
  • Amongst insurers, essential players for Arctic oil and gas extraction, 13 out of the world’s top 46 companies have an Arctic sector underwriting policy.

WHY IS THIS HAPPENING

  • Oil demand is recovering after the pandemic, some analyst even talk about $ 100/bbl
  • Financial institutes like JPM are not only pessimistic about renewable energy path they see much slower transition speed. 
  • JPMorgan sees several barriers to energy transition; slow penetration EV's, monumental cost of transmission infrastructure, and complexity in geological sequestration to mention few.
  • There is still a challenge in banking industry to make a clean break away from fossil fuels companies due to fears of low returns to investors.

CONSEQUENCES

  • International Panel on Climate Change warned of accelerating climate breakdown in the Arctic, with temperatures rising twice as quickly as elsewhere.  Despite the disturbing trend, the need to choke funds for the most climate damaging industries beginning hold traction. The regulations and legislation  are slowly but surely will catch up.

 

 

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