Oil and gas industry leaders are continuing their efforts to meet decarbonisation targets by utilizing a mix of existing strategies and emerging technologies. Carbon capture technology remains a key component of their emission reduction plans, along with investments in hydrogen, renewable energy sources, and low-carbon fuels. Energy storage solutions, particularly batteries, are also being explored, although their role is currently limited.
However, as we move into 2026, it has become clear that some companies are reevaluating their interim targets set for 2030 due to ongoing market volatility and policy uncertainties. Many companies are adjusting their timelines and shifting their investment priorities to focus on the resilience of their traditional hydrocarbon-based portfolios rather than rapid diversification.
While oil and gas firms are still actively involved in solar and wind power projects, the pace of investment in renewable energy transition has slowed down in recent years. Challenges in the market, geopolitical instability, and policy uncertainties have prompted companies like BP, Shell, and ExxonMobil to scale back or halt some of their renewable energy projects in favor of financial discipline. This shift in focus is a response to demand uncertainty and a prioritization of maximizing value from their existing assets.
Despite these challenges, the gradual transition towards low-carbon energy sources is still progressing, albeit at a more cautious and pragmatic pace. The industry’s approach has shifted from bold, immediate actions to a more measured, risk-adjusted, and demand-driven strategy.
Heightened concerns about energy security and the high capital costs associated with renewable projects have led to a slight increase in demand for fossil fuels in recent years. Many oil and gas companies are prioritizing their conventional operations to ensure a reliable energy supply using existing infrastructure, which has somewhat benefited the fossil fuel industry.
For more in-depth insights into the energy transition developments within the oil and gas sector and an updated competitive landscape overview, readers can refer to GlobalData’s latest theme report, ‘Energy Transition in Oil and Gas’.
This article was adapted from the original piece, “Oil and gas industry scaling back its energy transition initiatives,” published on Offshore Technology, a GlobalData-owned brand.
