Oil — DeCAF helps
find carbon cash cows
Whilst some predict the destruction of oil
demand because of electric vehicles and others
point to the threats of carbon pricing and
stranded assets, it is easy to conclude that oil
companies pose a signifcant risk to investors in
the years ahead.
Many investors have gravitated
towards the largest producers on the
assumption their diversifcation will provide
benefits. Yet the coming energy transition does
not have to be destructive for shareholders,
particularly if they understand that bigger is not
necessarily better.
Intuitively, price should matter. So as
volumes decline, value can still be created. But it
is not that simple and 2018 is the year which will
clarify which of the oil majors have the potential
to morph into carbon cash cows – highly
proftable entities that rely on relatively scarce
and declining volumes.
EU Forecast
euf:b18:159/nws-01