Re-Imagining Big Oils
Big Oils have shown tremendous ability to adapt to technological change in their 100+ years of history. Goldman Sachs Research believes it is now strategic that they drive a low carbon transition consistent with the global ambition to contain global warming within 2° C.
Big Oils have many tools to achieve this transition towards Big Energy and become broader, cleaner energy providers: a deeper presence in the global gas and power chains, including retail, EV charging and renewables; biofuels; petrochemicals; improved upstream and industrial operations; and carbon capture.
In this report, we discuss the options available and argue that the strategic objective can be delivered with improving corporate returns and renewed value for scale and integration. This transition will require deep cultural and corporate changes and may leave the higher carbon parts of the value chain financially stranded and underinvested, such as oil production (particularly oil sands and older fields) and refining, leading to potentially higher oil prices and refining margins in the coming decade and to a bigger role for private capital in those areas.