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These 3 Integrated Majors Are Leading the Energy Transition Race

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Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts. Most analysts believe that although renewable energy will meet future energy needs, this will not completely wipe out oil and natural gas demand. Demand for fossils fuels will also grow but at a slower pace.

The U.S. Energy Information Administration (EIA), in its International Energy Outlook 2021, revealed that global demand for renewables through 2050 will be the highest. Over the period, demand for oil and natural gas will also grow, although the pace of growth will not be like renewables, on the back of an expanding population and fast-growing economies, added EIA.

Thus, there are abundant opportunities for energy companies with a footprint in oil and gas resources and the renewable energy space. Three such companies are BP plc BP, Royal Dutch Shell plc (RDS.A) and Eni SpA E.

BP plc, a British energy giant, is planning to become a net-zero emissions player by 2050 or earlier. The integrated company intends to invest and boost its renewable energy generation capacity to 20 gigawatts (GW) by 2025. The company also has strong upstream and downstream activities, aided by recovering oil price and fuel demand.

Royal Dutch Shell also has the same ambitious target of becoming a net-zero emissions energy player by 2050 or earlier. The integrated energy company is expanding its presence in solar energy generation capabilities and foreseeing great potential in energy generations from offshore and onshore wind. The company also has sizable exposure to upstream and refining operations.

Eni is also leading the energy transition. The integrated energy player has an ambitious plan of reaching 60 GW of installed renewable energy capacity by 2050. This suggests a massive improvement from 1 GW of installed and sanctioned capacity last year. By 2050, it is planning for net-zero Scope 1, 2 and 3 greenhouse gas emissions. The massive crude price recovery is aiding Eni’s upstream energy business since the company is targeting a compound annual production growth rate of 4% through 2024 since 2020. Eni’s other impressive plan for the upstream business is targeting new discoveries of 2 billion barrels of oil equivalent through 2024 since 2021.

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