Expectations of shareholders of oil and gas companies for payments are growing amid rising commodity prices, according to a survey conducted by the Center for Energy Impact of the Boston Consulting Group (BCG). The survey included 250 institutional investors working with the oil and gas industry. The research data is at the disposal of “Lenta.ru”.
The proportion of those who consider it important to maintain or increase payments to shareholders increased by 14 percent compared to last year’s poll. First of all, we are talking about money that investors can receive in the form of dividends, but also about the redemption of their own shares by oil and gas companies. Energy stocks rose in 2021 on the back of high energy prices, which investors expect to remain strong in the near term. Thus, about 70 percent of those surveyed expect oil to cost more than $ 60 per barrel until 2024.
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At the same time, investors want oil and gas companies to respond to the challenges associated with the growing importance of the environmental agenda. Giants are being pushed for clear plans to reduce emissions and a clear energy transition strategy. In the future, the pressure may increase: while the climatic risk is included in the valuations of oil and gas companies, only 39 percent of those surveyed, but another 40 say they intend to follow this example.
Nearly 60 percent of respondents admitted to being pressured by clients to move away from fossil fuel investments. At the same time, investors for the most part expect that the industry will rely on gas in its development. 85 percent of those surveyed believe that it will be an important intermediate link between traditional hydrocarbons and renewable energy sources, and 70 percent expect that oil and gas companies will continue to grow thanks to natural gas. As for oil, two-thirds of those surveyed believe that demand for it will peak by 2030.
Investors believe that against the backdrop of changes in the energy sector, companies need to take certain steps to transform themselves. This is not only about reducing emissions (as indicated by 80 percent of investors), but also about investments in green energy sources – 82 percent of those surveyed noted them. Overall, 80 percent of investors also want clearer plans for the energy transition, while the majority admit that the first steps have already been taken, although this is not enough. Investors want low-carbon businesses to perform better in the next three years.
The growing importance of the green agenda in the future may create difficulties for Russian companies in the energy sector. Thus, the impact of environmental issues may complicate their access to foreign funding, said Dmitry Marinchenko, director of the group for natural resources and commodities at Fitch, in a conversation with Lenta.ru. At the same time, he said that investors from China and the Middle East will retain a more pragmatic approach compared to investors from the West.
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