carbon supply cost curves: evaluating financial risk to oil capital
TRANSCRIPT
Initiativearbon Tracker
Carbon supply cost curves: Û>�Õ>Ì��}�w�>�V�>��À�Ã��Ì�� oil capital expenditures
About Carbon Tracker6JG�%CTDQP�6TCEMGT�+PKVKCVKXG�%6+��KU�C�VGCO�QH�ƂPCPEKCN�URGEKCNKUVU�OCMKPI�ENKOCVG�TKUM�TGCN�KP�VQFC[oU�ƂPCPEKCN�markets.
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Contact
James Leaton Research Director LNGCVQP"ECTDQPVTCEMGT�QTI YYY�ECTDQPVTCEMGT�QTI VYKVVGT��"ECTDQPDWDDNG
Team Members
Jeremy Leggett� Chairman
Mark Campanale� (QWPFGT�CPF�'ZGEWVKXG�&KTGEVQT
Anthony Hobley� %JKGH�'ZGEWVKXG�1HƂEGT
James Leaton� Research Director
Luke Sussams� Senior Researcher
John Wunderlin��0QTVJ�#OGTKEC�5VCHH�#VVQTPG[
Reid Capalino� (KPCPEKCN�#PCN[UV
Margherita Gagliardi� %QOOWPKECVKQPU�1HƂEGT
Tracy Trainor� 1HƂEG�/CPCIGT
Jon Grayson� %JKGH�1RGTCVKPI�1HƂEGT
Acknowledgments
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Contents'ZGEWVKXG�5WOOCT[
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1. Introduction
2. Demand, price and capex
3. Higher risk operations
4. Geographical distribution across provinces
5. Company exposure
6. Conclusions and Recommendations
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Breakeven BrentOil Production (MBPD average)
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Understand exposure on the carbon supply cost curve
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The private sector plays a key role
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Majors can enhance value
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Independents are gambling on a high oil price
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Recommendations for investors
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Anthony Hobley
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1. Introduction
Investors engaging
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To spend or not to spend
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Risk factors
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%QORCPKGU�CTG�CNUQ�KPETGCUKPI�VJGKT�GZRQUWTG�VQ�WPEQPXGPVKQPCN�V[RGU�QH�J[FTQECTDQP�CPF�RJ[UKECNN[�EJCNNGPIKPI�GPXKTQPOGPVU��6JKU�KPENWFGU�UJCNG�QKN��QKN�UCPFU��WNVTC�FGGRYCVGT�CPF�VJG�#TEVKE��6JG�VGEJPKECN�TKUM�ECP�KPETGCUG�EQUVU��YJKNUV�VJG�KPFWUVT[�CNUQ�HCEGU�NGICN�CPF�TGIWNCVQT[�EJCNNGPIGU�CU�VJG[�UGGM�VQ�GPVGT�these frontier areas.
Creating value for shareholders
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5QOG�QKN�EQORCPKGU�CTG�CNTGCF[�UVCTVKPI�VQ�OQXG�VQYCTFU�VJKU�OQFGN��CPF�VJGTGHQTG�YKNN�JCXG�C�UVTQPI�UVQT[�VQ�VGNN�VJGKT�UJCTGJQNFGTU�CDQWV�JQY�VJG[�CTG�URGPFKPI�ECRKVCN�YKUGN[��#EVKXG�UJCTGJQNFGTU�PGGF�VQ�GPUWTG�VJCV�VJG[�CTG�TGFKTGEVKPI�EQORCPKGU�YJKEJ�CTG�PQV�QP�C�UWKVCDNG�VTCLGEVQT[��%CRKVCN�UCPEVKQPGF�PQY�YKNN�FGNKXGT�RTQFWEVKQP�HQT������CPF�DG[QPF��YJKEJ�EQWNF�GPVGT�C�XGT[�FKHHGTGPV�OCTMGV�CPF�QRGTCVKPI�EQPVGZV�
#U�UVGYCTFU�QH�ECRKVCN��YG�DGNKGXG�UJCTGJQNFGTU�UJQWNF�GPUWTG�VJCV�RGTHQTOCPEG�OGVTKEU�FTKXKPI�EQORCP[�OCPCIGOGPV�CTG�CNKIPGF�YKVJ�ETGCVKPI�UJCTGJQNFGT�XCNWG��1WT�CPCN[UKU�FGOQPUVTCVGU�VJCV�C�DNKPF�RWTUWKV�QH�TGUGTXGU�TGRNCEGOGPV�CV�CNN�EQUVU��QT�C�HQEWU�QP�JKIJ�NGXGNU�QH�GZRGPFKVWTG��TGICTFNGUU�QH�TGVWTPU��EQWNF�IQ�CICKPUV�KORTQXKPI�UJCTGJQNFGT�TGVWTPU��+PXGUVQTU�JCXG�CP�QRRQTVWPKV[�VQ�XQVG�QP�TGOWPGTCVKQP�RQNKE[�GCEJ�[GCT��6JG�EQORGPUCVKQP�KPEGPVKXGU�QH�QKN�EQORCPKGU�UJQWNF�DG�TGXKGYGF�VQ�RTGXGPV�YCUVGF�ECRKVCN�
A focus on capital discipline is therefore seen as prudent by many sector analysts.
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2. Demand, price and capex
Demand scenarios
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1KN�EQORCPKGU�RTQFWEG�UEGPCTKQU�CU�UJQYP�KP�VJG�ITCRJ�CNQPIUKFG�VJG�+'#�UEGPCTKQU��YJKEJ�VJG�EQORCPKGU�SWCNKH[�CU�PQV�DGKPI�RTGFKEVKQPU���9G�DGNKGXG�KV�KU�KPHQTOCVKXG�VQ�WPFGTUVCPF�YJCV�KV�OGCPU�HQT�VJG�DWUKPGUU�OQFGNU�QH�VJGUG�EQORCPKGU�KH�FGOCPF�FQGU�PQV�MGGR�TKUKPI��CU�KP�VJG�+'#����RRO�UEGPCTKQ��5EGPCTKQU�CPF�UVTGUU�VGUVU�UJQWNF�DG�WUGF�VQ�KFGPVKH[�RQVGPVKCN�DNKPF�URQVU��PQV�OGTGN[�VQ�NGIKVKOKUG�GZKUVKPI�RNCPU� 0
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
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IEA – New Policies IEA – 450 BP Shell – Mountains Shell – Oceans
Figure 1: Oil demand scenarios
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Bridging cost and carbon Markets allocating the carbon budget
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Competition between fossil fuels
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Carbon Supply Cost Curves
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Oil price sensitivity
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Degrees of warming
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This 360GtCO2 budget of cumulative emissions intersects with the supply cost curve at around the $60 break even oil price.
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0
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GtCO2
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Breakeven BrentOil Production (MBPD average)
Figure 2: Carbon cost curve of oil production
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Risk analysis
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Ownership of potential production to 2050
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It is unsustainable for many companies to maintain both capex and dividends unless the oil price continues to rise.
Private companies are responsible for over half of potential production.
Oil price assumptions
6JG�DTGCMGXGP�RTKEG�KPENWFGU�CP�+PVGTPCN�4CVG�QH�4GVWTP�+44��QH������YJGTG�028�����DWV�FQGU�PQV�CNNQY�CP[�TQQO�HQT�KPETGCUGF�EQUVU��QT�C�HCNN�KP�QKN�RTKEGU��+V�OC[�CNUQ�DG�KPUWHƂEKGPV�VQ�EQPVTKDWVG�VQ�OCMKPI�C�EQORCP[�ECUJƃQY�PGWVTCN�QPEG�KV�JCU�EQXGTGF�QVJGT�EQOOKVOGPVU�UWEJ�CU�FKXKFGPFU��4[UVCF�VJGTGHQTG�GZRGEV�VJCV�CP�QKN�EQORCP[�YQWNF�CNNQY�CPQVJGT�����YJGP�OCMKPI�KPXGUVOGPV�FGEKUKQPU��FGRGPFKPI�QP�KVU�RQTVHQNKQ�QH�RTQLGEVU��6JKU�OGCPU�VJCV�C�����DTGCMGXGP�RTQLGEV�YQWNF�DG�FGRGPFGPV�QP�CUUWOKPI�C�����$TGPV�QKN�RTKEG�
Rising costs
#EEQTFKPI�VQ�$NQQODGTI�FCVC��ECRKVCN�GZRGPFKVWTG�D[�VJG�NCTIGUV�QKN�EQORCPKGU�KU�PQY�ƂXG�VKOGU�VJG�NGXGN�KV�YCU�KP�������;GV�VJG�RTQFWEVKQP�QH�VJG�EQORCPKGU�JCU�DCTGN[�KPETGCUGF��6JKU�EQPVKPWKPI�HCNN�KP�ECRGZ�RTQFWEVKXKV[�JCU�DGGP�OCUMGF�D[�VJG�CPPWCN�CXGTCIG�$TGPV�QKN�RTKEG�TKUKPI�VQ�HQWT�VKOGU�VJG�NGXGN�KP�������6JG�EQUV�QH�RTQFWEKPI�VJG�OCTIKPCN�DCTTGN�QH�QKN�KU�KPETGCUKPI��#EEQTFKPI�VQ�)QNFOCP�5CEJU��QXGT�VJG�RCUV�VYQ�[GCTU�PQ�OCLQT�PGY�RTQLGEV�JCU�EQOG�QPUVTGCO�DGNQY�����DDN��YKVJ�OQUV�KP�VJG����s����DDN�TCPIG�
(TGG�ECUJƃQY%QORCPKGU�CNUQ�JCXG�VQ�OCKPVCKP�QVJGT�GZRGEVCVKQPU�CNQPIUKFG�ECRKVCN�GZRGPFKVWTG��5JCTGJQNFGTU�JCXG�DGEQOG�WUGF�VQ�FKXKFGPFU��)QNFOCP�5CEJU�GUVKOCVGF�KP�#RTKN������VJCV�QXGT�JCNH�QH�VJG�NKUVGF�QKN�EQORCPKGU�PGGF�QKN�RTKEGU�CDQXG������DDN�VQ�DG�ECUJƃQY�PGWVTCN��+P�VJG�ƂTUV�SWCTVGT�QH�������$TGPV�YCU�JQXGTKPI�CTQWPF�VJG������DDN�OCTM��6JKU�JCU�TGUWNVGF�KP�CPCN[UVU�CUMKPI�YJGVJGT�UQOGVJKPI�JCU�VQ�IKXG��+V�KU�WPUWUVCKPCDNG�HQT�OCP[�EQORCPKGU�VQ�OCKPVCKP�DQVJ�ECRGZ�CPF�FKXKFGPFU�WPNGUU�VJG�QKN�RTKEG�EQPVKPWGU�VQ�TKUG�
&GOCPF��RTKEG�CPF�ECRGZ�^���
0
100
200
300
400
Above $150
$120–150
$100–120
$80–100
$60–80
$0–60
GtCO
2
Oil p
rodu
ctio
n (m
bpd)
Part-listed
2
1
4
14
19
43
NOCs
5
4
12
28
39
215
Private
42
27
24
42
70
125
Majors
1
2
4
10
21
46
OPEC
8
9
7
17
22
189
20
40
60
0
Exposure to the low end of the cost curve
6JG�CFLCEGPV�EJCTV�UJQYU�VJG�FKUVTKDWVKQP�QH�INQDCN�RQVGPVKCN�RTQFWEVKQP�VQ�������DTQMGP�FQYP�D[�DTGCMGXGP�QKN�RTKEG�DCPFU��CETQUU�UVCVG�GPVKVKGU��J[DTKF�UVCVG�NKUVGF�EQORCPKGU��RTKXCVG�EQORCPKGU��QKN�OCLQTU�CPF�12'%�EQWPVTKGU�
(QEWUKPI�QP�VJG�RTQLGEVU�YKVJ�QXGT�����DTGCMGXGP��VJG�RGTEGPVCIG�QH�RQVGPVKCN�RTQFWEVKQP�CDQXG�VJKU�NGXGN�HQT�GCEJ�V[RG�QH�QYPGT�KU�CU�HQNNQYU�
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Notes
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Figure 3: Breakeven price bands of production by ownership type
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3. Higher risk operations
Different types of oil
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A. Operational challenges
• #TEVKE
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• 7NVTC�FGGRYCVGT
B. Unconventional oil types
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(KIWTG���UJQYU�VJG�DTGCMFQYP�QH�INQDCN�RQVGPVKCN�RTQFWEVKQP�VQ������D[�FKHHGTGPV�V[RGU�QH�QKN�CPF�NQECVKQP�
Notes
6JG�EQPXGPVKQPCN�ECVGIQT[�FKURNC[GF�KP�VJKU�TGRQTV�GZENWFGU�VJG�COQWPVU�UJQYP�HQT�QVJGT�EQPXGPVKQPCN�UWDUGVU�CNUQ�RTQXKFGF�KG�#TEVKE��&GGRYCVGT��7NVTC�FGGRYCVGT��
0
100
200
300
GtCO
2
Oil p
rodu
ctio
n (m
bpd)
400
0
20
60
40
Above $150
$120–150
$100–120
$80–100
$60–80
$0–60
22
11
14
30
43
258
5.3
2.5
1.4
1.0
1.2
1.1
6.7
6.0
5.2
7.0
6.6
12.2
4.6
4.3
1.9
5.1
5.8
6.6
0.2
0.2
2.0
3.0
17.3
21.9
0.0
0.9
5.5
11.9
20.4
2.9
0.2
2.4
0.7
1.5
3.5
12.0
0.0
0.0
0.2
1.2
6.5
9.1
Conventional Arctic Deepwater only
Ultra deep water only
Shale oil Oil sands Extraheavy oil
Tight liquids
Figure 4: Breakeven prices of carbon production by oil type 2014–2050
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Figure 5: Breakeven price band split by oil type 2012–2050
Private sector exposure
9G�PQY�HQEWU�QP�VJG�RQVGPVKCN�KPVGTGUVU�QH�EQORCPKGU�YJKEJ�CTG�GZENWUKXGN[�KP�VJG�RTKXCVG�UGEVQT�KG�PQV�KPENWFKPI�RCTV�NKUVGF�PCVKQPCN�QKN�EQORCPKGU���(KIWTG���KPFKECVGU�VJG�COQWPV�QH�RTKXCVG�EQORCP[�ECRGZ�GCTOCTMGF�VQ������HQT�VJG�RTKEG�DCPFU�KP�GCEJ�ECVGIQT[�
+P�VQVCN�VJGTG�KU�CTQWPF����VTP�QH�RQVGPVKCN�ECRGZ�QWV�VQ������HQT�RTQLGEVU�YJKEJ�TGSWKTG�OQTG�VJCP�C�����QKN�RTKEG��KPENWFKPI�
• ����VTP�HQT�#TEVKE�RTQLGEVU�
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0
2000
4000
6000
8000
10000
12000
Private above $150
Private $120–150
Private ($100–200)
Private $80–100
Private $60–80
3970
2142
1004
1175
1472
1793
646
255
69
67
1466
887
743
639
456
1685
843
336
464
451
24
48
122
441
560
61
91
451
601
1084
233
272
187
56
91
8
9
23
133
456
Tightliquids
Extraheavy oil
Oil sandsShale oilUltra deep water only
Deepwater only
ArcticConventional
US$m
n Ca
pex
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4. Geographical distribution across provinces
Figure 6: Map of oil provinces with high cost potential production 6JKU�OCR�FGRKEVU�VJG�QKN�RTQXKPEGU�YJKEJ�JCXG�VJG�NCTIGUV�RQVGPVKCN�FGXGNQROGPVU��YJKEJ�TGSWKTG�CDQXG�C�����OCTMGV�RTKEG��KPENWFKPI�UQOG�QRGP�CETGCIG�
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Alberta, CA
Gulf Coast, US
Gulf of Mexico deepwater, US
Rio de Janeiro, BR
Western Siberia, RU
Atlantic Ocean, AO
Caspian Sea, KZ
Antsiranana, MG
Barents Sea, NO
Neuquen, AR
Anzoategui, VE
Alaska, US
Newfoundland and Labrador, CA
Atlantic Ocean, BR
South Russia, RU
North Sea, NO
Northwest Territories, CA
North Sea, DK
Ahmadi, KW
Atlantic Ocean, GB
Atlantic Ocean, NG
Gulf of Mexico, MX
CAPEX (USD $bn)Conventional Arctic Deepwater Ultra Deepwater
Shale Oil Oil Sands Tight Liquids
0 50 100 150 200 250 300 350 400 450
Extra Heavy Oil
Geography of potential capex
6Q�HQEWU�OQTG�QP�VJG�ECRGZ�YJKEJ�RTKXCVG�UGEVQT�EQORCPKGU�CTG�OQUV�NKMGN[�VQ�EQOOKV�QXGT�VJG�PGZV�FGECFG��VJKU�EJCTV�UJQYU�VJG�IGQITCRJ[�CPF�QKN�V[RG�CUUQEKCVGF�YKVJ�RQVGPVKCN�ECRGZ�KP�VJG�4[UVCF�FCVCDCUG��6JKU�VQVCNU�CTQWPF�����VTKNNKQP��HQEWUKPI�KP�QP�VJG�JKIJGUV�EQUV��JKIJGUV�TKUM�QRRQTVWPKVKGU�YKVJKP�C����[GCT�VKOGHTCOG��6JKU�RQVGPVKCN�ECRGZ�UJQWNF�DG�VJG�HQEWU�QH�KPXGUVQT�GPICIGOGPV�YKVJ�QKN�EQORCPKGU��
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5. Company exposure
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State-owned
6Q�KNNWUVTCVG�VJG�NKOKVGF�TQNG�QH�PCVKQPCN�QKN�EQORCPKGU�YG�JCXG�KPENWFGF�VJGO�KP�VJGUG�VCDNGU��6JG�OCKP�CTGC�QH�GZRQUWTG�HQT�VJKU�ITQWR�KU�KP�VJG�JKIJ�EQUV�EQPXGPVKQPCN�RNC[U��*QYGXGT�VJG�EQPVTKDWVKQP�QH�EQORCPKGU�YKVJ�CP[�UVCVG�QYPGTUJKR�KPENWFKPI�RCTV�NKUVGF�01%U��KU�PQV�KPENWFGF�KP�VJG�ƂIWTGU�HQT�RTKXCVG�UGEVQT�VQVCNU�
Majors’ exposure
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Smaller independents
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(KIWTG����%QPXGPVKQPCNCapex
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Figure 9: ArcticCapex
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Figure 11: DeepwaterCapex
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Figure 10: Oil sandsCapex
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Figure 12: UltradeepwaterCapex
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Absolute exposure
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Relative exposure
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• 9JCV�KU�VJG�VKOKPI�QH�VJG�RNCPPGF�GZRGPFKVWTG�CPF�YJGP�YQWNF�RTQFWEVKQP�DG�GZRGEVGF�VQ�EQOG�QPNKPG!
• 9JCV�RTQRQTVKQP�QH�VJG�PGZV�VGP�[GCTU�QH�ECRGZ�FQGU�VJKU�TGRTGUGPV!
• +U�VJG�ECRGZ�EQPEGPVTCVGF�KP�C�RCTVKEWNCT�TGIKQP�QT�QKN�V[RG��GI�QKN�UCPFU�QT�FGGRYCVGT!
• 9JCV�QVJGT�ECUJƃQY�EQOOKVOGPVU�FQ�VJG[�JCXG!
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Cutting the capex to the upper end of the cost curve could be a positive process rather than a painful one.
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our analysis are as follows:
Capex (2014–2025) US$million
Company Conventional Arctic Deep Water
Ultra Deep Water Shale Oil Oil Sands Extra
HeavyTight
LiquidsHigh cost/risk total
Total company capex
Petrobras 26 79,336 4,089 83,452 454,317
ExxonMobil 1,736 3,944 22,307 20,066 2,286 18,075 5 4,927 73,346 290,012
Rosneft 69,009 456 129 92 69,686 264,661
Shell 49 152 20,254 15,869 1,169 25,898 63,392 314,551
Total 58 50 17,188 26,909 11,987 56,193 197,674
Chevron 3,062 4,942 20,095 12,857 7,435 7,384 55,774 247,093
BP 228 6,546 11,039 24,223 3,978 46,014 253,066
Gazprom 44,214 420 9 81 44,724 111,881
Statoil 2 22,432 8,329 22 7,848 38,634 218,578
CNRL 2 1 38,507 45 38,555 74,917
Eni 48 3,768 11,481 11,412 78 9,448 36,235 173,426
Saudi Aramco 35,582 35,582 402,509
Suncor Energy 114 3,142 20 31,402 2 34,679 70,995
Lukoil 28,997 9 29,006 132,497
Cenovus Energy 244 25,650 2,961 28,855 46,805
OGX Petroleo e Gas 21,117 2,340 4,681 28,138 30,839
ConocoPhillips 1,432 6,679 5,833 9,054 939 2,212 26,150 140,085
BG 115 5 2,001 23,147 25,267 55,775
Athabasca Oil Sands 23,634 65 23,698 26,498
Repsol 1,223 90 2,166 15,601 19,079 47,030
20 | Carbon Tracker 2014: Oil
7
Figure 14: The following companies have the largest exposure where 50% or over of the total capex is in these categories and RTQXKPEGU�CDQXG����$'12�
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Company Conventional Arctic Deep Water
Ultra Deep Water Shale Oil Oil Sands Extra
HeavyTight
Liquids
Total high cost/high
risk
%age high cost/high risk
capex
CNRL �� �� ������� ��� ������� ���
Cenovus Energy ���� ������� ������ ������� ���
OGX Petroleo e Gas ������� ������ ������ ������� ���
Athabasca Oil Sands Corp ������� 65 ������� ���
Laricina Energy ������� ������� ���
Teck Resources Limited ������� ������� ����
MEG Energy ������� ������� ���
OSUM ������� ������� ���
Denbury Resources ������ ������ ���
Queiroz Galvao E&P ���� ������ ������ ������ ����
Sunshine Oil Sands ������ ������ ���
Barra Energia ������ ������ ������ ����
Value Creation ������ ������ ���
Reliance ���� ������ ������ ���
Rocksource ��� ������ ������ ����
Clayton Williams Energy ���� ������ ������ ������ ���
Paramount Resources ��� ������ 8 ������ ���
Famfa Oil ������ ������ ����
2CTVGZ�)WNDGPMKCP�(FP� ��� ������ ������ ���
Forest Oil ���� ������ ������ ���
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Demand• +PFWUVT[�FGOCPF�RTQLGEVKQPU�QHVGP�CUUWOG�DWUKPGUU�CU�WUWCN��CPF�FQ�PQV�V[RKECNN[�CNNQY�HQT�UKIPKƂECPV�EJCPIGU�KP�EQUVU��EQORGVKVKQP��GHƂEKGPE[�QT�GOKUUKQPU�EQPUVTCKPVU��6JGTG�CTG�C�TCPIG�QH�RQVGPVKCN�GPGTI[�CPF�GOKUUKQPU�UEGPCTKQU�DGVYGGP�VYQ�CPF�UKZ�FGITGGU�QH�YCTOKPI�VJCV�PGGF�VQ�DG�EQPUKFGTGF��
• 6JG�CUUWORVKQPU�WPFGTN[KPI�FGOCPF�HWVWTGU�PGGF�VQ�DG�UVTGUU�VGUVGF��(QT�GZCORNG�%JKPGUG�GEQPQOKE�ITQYVJ�KU�CNTGCF[�HCNNKPI�UJQTV�QH�VJG�TCVGU�VJCV�CTG�DWKNV�KPVQ�OCP[�GPGTI[�FGOCPF�OQFGNU��7UKPI�FGOCPF�OQFGNU�VQ�LWUVKH[�ECRGZ�PGGFU�ITGCVGT�UETWVKP[�CPF�FGDCVG�
• %QORCPKGU�EQWNF�RTQXKFG�UVTGUU�VGUV�ƂPFKPIU�WUKPI�C�TCPIG�QH�QKN�RTKEGU�YKVJQWV�IKXKPI�URGEKƂE�RTQLGEV�KPHQTOCVKQP��6JKU�CPCN[UKU�EQWNF�TGƃGEV�VJG�TCPIG�QH�QKN�RTKEGU�GZRGTKGPEGF�KP�VJG�RTGXKQWU�FGECFG�
6. Conclusions and Recommendations
Bridging carbon and cost• (QUUKN�HWGNU�CTG�TGCNKUKPI�VJCV�VJG[�CTG�KPETGCUKPIN[�EQORGVKPI�HQT�C�ƂPKVG�ECTDQP�DWFIGV��9G�JCXG�EJQKEGU�CDQWV�WUKPI�KV�HQT�DWTPKPI�EQCN��QKN�QT�ICU��6JG�VQVCN�RQVGPVKCN�RTQFWEVKQP�KP�VJG�4[UVCF�7%WDG�FCVCDCUG�QH�CTQWPF�����VTKNNKQP�DCTTGNU�QH�QKN�RTQFWEVKQP��GSWKXCNGPV�VQ����)V%1�.
• #U�C�TGHGTGPEG�RQKPV��C�VQVCN�HQUUKN�HWGNU�DWFIGV�VQ�IKXG�CP�����EJCPEG�QH�VJG��&5��KU�CTQWPF����)V%1� VQ�������$CUGF�QP�VJG�EWTTGPV�UJCTG�QH�GPGTI[�GOKUUKQPU��VJKU�VTCPUNCVGU�VQ�����QT����)V%1� for QKN��6JG�ECTDQP�UWRRN[�EQUV�EWTXG�HQT�QKN�UJQYU�OCTIKPCN�RTQFWEVKQP�CDQXG�����$'12�����OCTMGV�RTKEG�TGSWKTGF��VCMGU�WU�QXGT�VJKU���%�UEGPCTKQ�ECTDQP�DWFIGV��
• 9G�JCXG�KFGPVKƂGF�C�OCTIKPCN�RTKEG�DCPF�DGVYGGP�VJG�����$'12��&5�KPVGTXGPVKQP�CPF�YJGTG�GEQPQOKE�XWNPGTCDKNKV[�KU�CNTGCF[�XKUKDNG�CV�����$'12��5QOG�QH�VJKU����s���OC[�IGV�FGXGNQRGF�GXGP�KP�C��&5�CU�RQNKVKECN�HCEVQTU�CPF�GPGTI[�UGEWTKV[�EQPEGTPU�OGCP�VJCV�VJG�RWTG�EQUV�NQIKE�QH�VJG�EQUV�EWTXG�FQGU�PQV�RNC[�QWV��9G�VJGTGHQTG�FGEKFGF�VQ�HQEWU�QP�RQVGPVKCN�RTQFWEVKQP�CDQXG�����DTGCMGXGP�YJGTG�GEQPQOKE�CPF�ENKOCVG�TKUM�ENGCTN[�QXGTNCRRGF�
Private sector has a major role• %QORNGVGN[�RTKXCVG�UGEVQT�EQORCPKGU�JCXG�����QH�VJG�RQVGPVKCN�RTQFWEVKQP�VQ�������YKVJ�RCTV�UVCVG�RCTV�NKUVGF�EQORCPKGU�QYPKPI������6JKU�NGCXGU�����KP�VJG�JCPFU�QH�RWTGN[�UVCVG�QYPGF�GPVKVKGU��6JG�RTKXCVG�UGEVQT�JCU�C�OQTG�UKIPKƂECPV�TQNG�KP�VJG�HWVWTG�QH�QKN�RTQFWEVKQP�VJCP�UKORNG�TGUGTXGU�FCVC�OC[�UWIIGUV�
• 6JKU�KU�GURGEKCNN[�VJG�ECUG�YJGP�HQEWUKPI�CV�VJG�VQR�JCNH�QH�VJG�EQUV�EWTXG��9JQNN[�RTKXCVG�UGEVQT�EQORCPKGU�JCXG�
• ����QH�VJG�����)V%1��QH�RTQFWEVKQP�YKVJ�C�$'12�QXGT���������$TGPV�
• ����QH�VJG����)V%1��QH�RTQFWEVKQP�KP�VJG�OCTIKPCN��������$'12�TCPIG��������$TGPV�
• ����QH�VJG����)V%1��QH�RTQFWEVKQP�YKVJ�WPFGT�����$'12�����$TGPV�
Type of production• 6JGTG�KU�ECRGZ�QH�����VTP�VQ������GCTOCTMGF�HQT�&GGRYCVGT�CPF�#TEVKE�RTQFWEVKQP�TGSWKTKPI�C�$'12�CDQXG�����$TGPV������YJKEJ�YKNN�ECTT[�CFFKVKQPCN�VGEJPKECN�CPF�TGRWVCVKQPCN�TKUM��CU�YGNN�CU�C�HWTVJGT�����VTP�VQ������QH�RQVGPVKCN�ECRGZ�KP�QVJGT�EQPXGPVKQPCN�RTQLGEVU�KP�VJKU�EQUV�TCPIG��6JGUG�RTQLGEVU�FQ�PQV�OCMG�GEQPQOKE�UGPUG�CPF�EQPƂTOCVKQP�KU�PGGFGF�VJCV�VJG[�YKNN�PQV�RTQEGGF�WPFGT�VJG�DCPPGT�QH�TGRNCEKPI�XQNWOGU�
• +P�VGTOU�QH�WPEQPXGPVKQPCN�QKN�V[RGU��VJG�NCTIGUV�RQVGPVKCN�RTQFWEVKQP�VQ������UKVU�KP�VJG�QKN�UCPFU������VTP�QH�ECRGZ���YKVJ�C�HWTVJGT�����VTP�HQT�GZVTC�JGCX[�QKN��UJCNG�QKN�CPF�VKIJV�NKSWKFU�EQODKPGF�
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Geographic distribution• 6JG�CPCN[UKU�KPFKECVGU�VJCV�����QH�VJG�RQVGPVKCN�VQ�RQVGPVKCN�JKIJ�EQUV�ECRGZ�KU�EQPEGPVTCVGF�KP����RTQXKPEGU��6JGUG�CTG�NQECVGF�KP�%CPCFC��75��$TC\KN��4WUUKC��VJG�#VNCPVKE�1EGCP��-C\CMJUVCP��/CFCICUECT��0QTYC[�CPF�#TIGPVKPC�
• 6JG�FCVC�TGƃGEVU�VJG�VTGPF�VJCV�VJGTG�CTG�NKOKVGF�QRRQTVWPKVKGU�VQ�FKUEQXGT�NCTIG�PGY�EQPXGPVKQPCN�ƂGNFU�VJCV�FQ�PQV�KPXQNXG�FGGRYCVGT�QT�#TEVKE��5QOG�TGIKQPU�JCXG�CNUQ�CRRGCTGF�TGEGPVN[�CU�HWTVJGT�GORJCUKU�JCU�DGGP�RNCEGF�QP�WPEQPXGPVKQPCNU�VQ�OCKPVCKP�RTQFWEVKQP�
• 6JG�QKN�UCPFU�QH�#NDGTVC�TGOCKP�VJG�RTKOG�ECPFKFCVG�HQT�CXQKFKPI�JKIJ�EQUV�RTQLGEVU��6JG�KUQNCVGF�PCVWTG�QH�VJG�OCTMGV�YKVJ�WPEGTVCKPV[�QXGT�GZRQTV�TQWVGU�CPF�EQUV�KPƃCVKQP�DTKPIU�TKUM��
Company exposure• 6JG�NCTIGUV�EQORCPKGU�JCXG�NCTIG�CDUQNWVG�GZRQUWTG�VQ�JKIJ�EQUV�RTQLGEVU��DWV�VJKU�KU�QHHUGV�VQ�XCT[KPI�FGITGGU�D[�GZRQUWTG�NQYGT�FQYP�VJG�EQUV�EWTXG��
• 6JGTG�CTG�QRRQTVWPKVKGU�HQT�VJG�OCLQTU�VQ�TGFWEG�VJGKT�GZRQUWTG�VQ�VJG�WRRGT�GPF�QH�VJG�EQUV�EWTXG�CPF�KORTQXG�XCNWG�TCVJGT�VJCP�EJCUG�XQNWOG�
• 6JGTG�CTG�UQOG�UOCNNGT�EQORCPKGU�YJQ�CRRGCT�JKIJ�WR�VJG�NGCIWG�VCDNGU�TGNCVKXG�VQ�VJGKT�UK\G��6JKU�UWIIGUVU�VJG[�OC[�JCXG�JKIJ�GZRQUWTG�VQ�RCTVKEWNCT�JKIJ�EQUV�TKUM�TGIKQPU�QT�V[RGU�QH�QKN��
• %QORCPKGU�YKVJ�C�JKIJ�RTQRQTVKQP�QH�HWVWTG�ECRGZ�QRRQTVWPKVKGU�CUUQEKCVGF�YKVJ�RQVGPVKCN�RTQFWEVKQP�HTQO�VJG�WRRGT�GPF�QH�VJG�EQUV�EWTXG�CTG�GZRQUGF�VQ�EQUV�KPETGCUGU�CPF�RTKEG�HCNNU��5OCNNGT�QRGTCVQTU�OC[�PQV�JCXG�VJG�ƂPCPEKCN�UVTGPIVJ�VQ�VQNGTCVG�NQYGT�FGOCPF�RTKEG�UEGPCTKQU�
• 5QOG�EQORCPKGU�OC[�UVTWIING�VQ�OCKPVCKP�ECRGZ�CPF�FKXKFGPFU�IQKPI�HQTYCTF��+FGPVKH[KPI�CTGCU�QH�RQVGPVKCN�YCUVGF�ECRKVCN�PQY�YKNN�RTGXGPV�HWVWTG�RTQDNGOU��
• 9G�JCXG�KFGPVKƂGF�����VTKNNKQP�QH�ECRGZ�QWV�VQ������KP�JKIJGT�EQUV�RTQLGEVU�TGSWKTKPI�QXGT�����OCTMGV�RTKEG��YJKEJ�YG�DGNKGXG�UJQWNF�DG�VJG�HQEWU�QH�KPXGUVQT�GPICIGOGPV�
Recommendations for investors
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Technical Analysis
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www.carbontracker.org