IN a much anticipated move, the leaders of the world’s top oil and gas companies have established a fund to combat climate change – pledging to invest US$1bn over the coming decade to reduce emissions.
Rumours emerged earlier this week that the Oil and Gas Climate Initiative (OGCI) – an alliance of ten major energy firms including Saudi Aramco and BP – was set to pledge a joint investment. Today, the group announced that the new US$1bn fund will initially focus on accelerating the application of CCS and reducing methane emissions from oil and gas sector operations.
The decision to prioritise these areas follows detailed technical work and represents the areas where the group believes the industry has the most meaningful influence and where its collaborative work can have the greatest influence, OGCI said.
In a joint statement, the heads OGCI’s member companies which together represent one fifth of the world’s oil and gas production, said: “The creation of OGCI Climate Investments shows our collective determination to deliver technology on a large-scale that will create a step change to help tackle the climate challenge. We are personally committed to ensuring that by working with others our companies play a key role in reducing the emissions of greenhouse gases, while still providing the energy the world needs.”
It has also committed to make investments to support improved energy and operational efficiencies beyond its own immediate sector, including energy intensive industries and vehicle manufacturers.
Luke Warren, CEO of the Carbon Capture and Storage Association, who described the pledge as a historical announcement, said: “Following Norway’s recent announcement to push forward with three industrial CCS projects, as well as new projects such as the Petra Nova CCS plant in the US which is due to begin operation by the end of the year, the fund launched today by the OGCI shows that there is no lack of international interest in delivering CCS.
“The world’s leading climate change experts all agree that CCS is vital to reducing emissions; the IPCC has estimated that the cost of meeting global targets without CCS would increase by almost 140%. We owe it to the world to ensure there is sufficient energy for all, whilst tackling climate change and keeping costs as low as possible”.
OGCI pledged support for a global commitment to reduce emissions ahead of the UN’s Paris climate conference (COP21) in December. It then welcomed the resulting commitment to limit global temperatures to well below 2°C, noting it offers the world a clear signal that will help “all actors” take actions and make investments towards a lower carbon future.
Key countries including China and the US have ratified the COP21 agreement, and world leaders will meet later this month in Morocco to agree the next phase, including how to implement the targets.
OGCI, whose members are BP, CNPC, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total, will announce a CEO and management team for the new fund in the near future.
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