Transition resilience
Investment decisions for transition resilience
As demand changes through the energy transition, we will carefully assess the competitiveness of new projects prior to investment decision.
We have developed a ‘transition case’ methodology which, like a business case and a safety case, helps us to manage risk by assessing investment opportunities across a range of climate-related factors. There are currently six elements to our transition case methodology, which was first applied to the final investment decision for the Trion development in 2023 and recently for the acquisition of the Beaumont New Ammonia Project.1,2,3
Transition case for oil and gas investments
We consider.
- Investment attractiveness utilising a range of economic assumptions informed by climate scenarios as well as other factors such as geopolitics and macroeconomics.
- Cash flow scenario analysis impact by comparing the impact 'with and without opportunity' on future cash flows using scenarios, including a 1.5°C case.
- Potential demand resilience analysis considering the competitiveness of the project’s cost of supply relative to the range of demand in IPCC scenarios, including 1.5°C cases.
- Climate-related risks and opportunities by comparing the impact 'with and without opportunity' on our portfolio aggregate climate risk exposure.
- Scope 1 and 2 portfolio emissions assessing the impact of 'design out' work on project emissions, and of residual emissions upon portfolio emissions abatement demand, and portfolio emissions intensity.
- Scope 1, 2 and 3 portfolio emissions intensity by comparing the impact 'with and without opportunity' on our portfolio.
Footnotes
Footnotes
