OIL AND GAS ROADMAP: BOARD DOCUMENT

The challenge for oil and gas companies will be balancing a need to invest in new technologies while keeping core assets operating for longer - focusing both, profit and profitability.

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For oil and gas, petrochemical CEOs to thrive their sector(s) in a post-2030 world, key considerations include: rapidly diversifying into low-carbon energy sources, aggressively reducing emissions from existing operations, investing heavily in carbon capture technologies, strategically managing asset portfolios to minimize stranded asset risk, adapting business models to a changing energy landscape, building strong stakeholder engagement, and fostering innovation to develop new clean energy solutions; all while navigating the evolving regulatory environment and investor expectations regarding sustainability.?

Despite its significant importance, the oil and gas industry faces a decisive decade, navigating between energy affordability, security, sustainability, and competitiveness (the ongoing Energy Transition). CEOs must lead with foresight, balancing the need to operate core assets efficiently while transitioning toward a low-carbon future.

This Board Document provides a comprehensive roadmap for OIL & GAS, PETROCHEMICAL INDUSTRY CEOs to thrive in a post-2030 world, addressing key trends, challenges, and opportunities while leveraging current industry performance and financial data. It also provides strategic guidance for the worldwide oil & gas industry - addressing key trends, financial insights, and action-oriented pragmatic strategies.

Strategic Framework for Thriving in a Post-2030 World        

1. Energy Transition Strategy

Action Points:

• Transition to low-carbon energy sources such as renewables, hydrogen, and carbon capture and storage (CCS).
• Forge partnerships with renewable energy firms to scale up capabilities rapidly.
• Decarbonize existing assets through retrofitting and advanced technologies.

Key Metrics:

• Percentage of investment in low-carbon energy projects vs. traditional oil and gas.
• Carbon intensity reduction targets (aligned with Paris Agreement goals).

2. Operational Efficiency and Emissions Reduction

Action Points:

• Leverage AI and IoT for real-time monitoring of production efficiency and emissions.
• Implement energy-saving measures and reduce methane leaks across operations.
• Ensure transparent emissions reporting to align with regulatory and stakeholder expectations.
• Top-three priorities: "METHANE", "METHANE" and "METHANE" (emissions reduction)

Success Indicators:

• Scope 1 and Scope 2 emissions reductions year-over-year.
• Cost savings through efficiency gains.

3. Portfolio Management and Mitigating Stranded Asset Risks

Action Points:

• Identify high-risk assets and phase out or divest unsustainable ventures.
• Reallocate capital toward scalable, profitable low-carbon investments.
• Analyze demand trends to prioritize long-term resilient assets.

Key Metrics:

• Proportion of portfolio invested in new energy ventures.
• Ratio of revenue from traditional vs. low-carbon energy sources.

4. Innovation and Technology Development

Action Points:

• Invest in next-gen technologies such as advanced biofuels, green hydrogen, and scalable CCS.
• Foster an innovation-focused organizational culture to stay ahead of evolving market needs.
• Collaborate on joint R&D projects to pool resources for clean energy breakthroughs.

Performance Indicators:

• R&D expenditure as a percentage of revenue.
• Commercialization success rate of new energy solutions.

5. Stakeholder Engagement and Communication

Action Points:

• Actively engage with governments, NGOs, and investors to align on sustainability goals.
• Strengthen ESG narratives to improve investor confidence.
• Build public trust through transparent reporting on energy transition progress.

Key Metrics:

• ESG ratings improvement year-over-year.
• Number of stakeholder engagements and partnerships.

6. Talent Management and Workforce Development

Action Points:

• Upskill the workforce in renewable energy and digital transformation.
• Attract young talent passionate about sustainability and innovation.
• Offer training programs to transition existing staff to new energy roles.

Success Indicators:

• Percentage of workforce trained in low-carbon technologies.
• Retention rate of key talent.

Financial Insights and Current Industry Trends

Industry Performance Metrics

E&P Companies Leading TSR:

• Average TSR for E&P companies: 15% since 2019.
• U.S. companies outperform globally, with TSR averaging 14% compared to 6% in other regions.

Key Observations:

• Top-performing quartile dominated by U.S. independents.
• European IOCs lag due to slower adoption of energy transition strategies.
• National Oil Companies (NOCs) face structural challenges impacting TSR.

Key Board and Investor Duties

Role of the Board

? Strategic Oversight:

• Approve and regularly review energy transition strategies.
• Ensure alignment with long-term goals, including emissions reduction and shareholder value creation.

? Risk Management:

• Identify and mitigate stranded asset risks.
• Oversee compliance with regulatory changes and geopolitical developments.

? Capital Allocation:

• Guide investments in new energy ventures.
• Balance returns with long-term sustainability imperatives.

Investor Responsibilities

1?? Sustainability Focus:

• Demand transparency in ESG reporting and emissions reductions.
• Engage actively in energy transition roadmaps of portfolio companies.

2?? Capital Deployment:

• Support scalable and profitable renewable investments.
• Incentivize innovation-driven strategies through active funding.

Critical Questions for CEOs

1. How to balance profitability with long-term sustainability?
2. What conditions make new energy ventures profitable and scalable?
3. How to leverage M&A for growth while minimizing risks?
4. What role will AI and technology play in future-proofing operations?
5. How to meet investor expectations for long-term value amid industry disruptions?

The oil and gas industry has an unprecedented opportunity to redefine its future role in global energy systems. By embracing innovation, decarbonization, and strategic investments, companies can achieve sustained profitability while contributing to a sustainable energy transition.

A forward-looking, well-coordinated effort across leadership, boards, and stakeholders will be essential to navigating the complex road ahead.

Next Steps

① CEOs and Boards to align on transition timelines and actionable plans by mid-2025.

② Initiate pilot projects for renewable integration and CCS deployment by 2026.

③ Commit to interim Scope 1 and Scope 2 emissions reduction targets by 2027.

This roadmap provides a robust framework to guide the oil and gas industry toward a sustainable and gainful future.

This document sets a foundation for boardroom discussions and strategic action plans, ensuring the industry's success beyond 2030 in a rapidly changing global energy landscape.

Request Services: "Bo" Subodh Dalvi , Board Director | Executive Advisor | Harvard Business Review ADVISORY COUNCIL | Impact●Investor |

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