Think tank says investors should weigh risks of big high-carbon projects

|By:, SA News Editor

Large oil companies are betting more than $1T on large-scale, “high-risk” projects over the next decade, and investors should question the assumptions underpinning that spending, urges the Carbon Tracker Initiative.

The think tank advises oil investors to require annual stress tests of oil companies’ sensitivity to a low-price scenario, and to ask what demand and price assumptions underpinned companies’ spending strategy, as some major pension funds already have begun to do.

Among companies with the highest exposure to such high-risk projects, as measured in dollar terms, are Petrobras (PBR), Exxon (XOM), Rosneft (RNFTF), Shell (RDS.A, RDS.B) and Total (TOT), the CTI says in a new report.