Responsible Change: How Governments Can Address Environmental, Social and Governance Challenges When Petroleum Assets Change Hands
Key messages
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As the world moves toward a future beyond oil and gas, petroleum assets will change hands, with different kinds of companies replacing others.
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Since 2014, around USD 88 billion in assets have moved from publicly listed to private companies. The roles of sub-Saharan African and Latin American companies in their home countries have expanded.
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Globally, the role of national oil companies (NOCs) is growing. NOCs have acquired around $24 billion in assets from non-NOCs since 2014.
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The growing role of private and local companies and NOCs potentially gives producer countries greater control over their petroleum sectors, including the pace of an eventual pha搜索引擎优化ut.
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However, these companies often have less capacity and fewer transparency, environmental, social and governance commitments than publicly listed international companies. This increases the risk that these companies’ operations will negatively impact the environment and communities, and that they will be unable to pay for decommissioning when production ends.
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Many assets that sub-Saharan African and Latin American NOCs have acquired appear vulnerable to energy transition risks.
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Governments should exercise approval rights over asset transfers to ensure buyers have requisite capacity to operate with high standards. They should ensure transparency to allow host communities and the public to better understand transfer impacts and how the government and/or companies will manage them, and strengthen regulations to address key issues arising from transfers including emissions management and reporting, and decommissioning funding.
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Governments should require NOCs to make adequate disclosures about their acquisitions to ensure NOCs manage risks to the public purse.