Oil exporters and the challenges ahead: the role of NOCs in energy transitions

Abstract

Abstract While constructing pathways to achieving energy transitions is challenging to all global community members, this challenge is even greater for oil-exporting countries. Oil-exporting countries and their national oil companies (NOCs) are key players in the energy transitions. These actors’ existing capacities (financial, technical, human) must be leveraged to accelerate decarbonization processes that are scaled and globally deployed. Energy transition roadmaps must embrace all relevant actors, including oil companies, as stakeholders that can significantly contribute to the acceleration of energy transitions across the globe. This situation must be reflected in outlooks and assessments of energy transitions. This article studies the regulatory conditions and interventions that have made the evolution of several NOCs possible as relevant actors in the 21st-century landscape, considering their activities in traditional energy sources, decarbonization solutions, and new energy sources. These NOCs vary with some having greater flexibility in shaping policies while others needing to comply with regulatory standards. All NOCs in this study, ADNOC, ARAMCO, and the NNPCL were entrusted with a degree of autonomy in addressing climate change, yet the larger margin of discretion ADNOC and ARAMCO corporations enjoyed has allowed them to excel in shaping and implementing these policies. The focus of this paper is on the role of soft law in this change, particularly ESG standards, as leading energy transition governance tools, which introduce accountability and environmental principles that guide the activity of these corporate actors beyond bear minimum requirements in laws and regulations.