CEOs call for effective climate change deal
The chief executives that make up the Oil and Gas Climate Initiative (OGCI) are from BP, Total, UK energy firm BG, Italy's Eni, Saudi Arabia's state-owned Saudi Aramco, Shell, Norway's state-controlled Statoil, Mexico's state-owned Pemex, Indian private-sector conglomerate Reliance Industries and Spanish oil group Repsol.
The statement calls for "an effective climate change agreement" at the UN Framework Convention on Climate Change's 21st Conference of the Parties (Cop21) in December, with the chief executives agreeing to collaborate in areas such as efficiency, natural gas, research and development and carbon capture and storage.
The OGCI also said it would contribute to increasing the share of gas in the global energy mix and eliminate what it calls "routine flaring" and methane emissions from its operations.
"Our shared ambition is for a 2°C future. It is a challenge for the whole of society. We are committed to playing our part."
The statement also highlighted that "governments set the conditions within which we produce and use energy and have a critical role to play in creating clear stable policy frameworks that are consistent with a 2°C future". The Cop21 gathering in Paris is seeking a legally binding international climate agreement to limit a global temperature increase to 2°C.
Speaking at a press conference following the launch of the initiative, the chief executives of both Total and BP played down the absence of any US companies from the initiative.
"I am not disappointed [about the absence of US companies]," said Total chief executive Patrick Pouyanne. "I am convinced that the club will become larger in the future." Chinese oil and gas firms had also been invited to join, Pouyanne added, and one large Chinese firm will do so before the end of the year.
BP chief executive Bob Dudley said all of the firms already involved in the initiative had sizeable investments in the US. "This is a large group and I think we can make a difference," he added.
Asked about the absence of any comment around carbon pricing in the joint statement, Dudley said the initiative decided it was best not to take a position.
"We all come at this from different starting points," he said. "Each company has a different view."
Statoil chief executive Eldar Saetre said forming a position on carbon pricing had been one of the most "difficult dilemmas" for the group, whilst outlining his own belief that it was the "only tool that that can really incentivise rational decision-making in the direction we want".
Asked about the danger of stranded assets in a 2°C scenario, none of the chief executives explicitly accepted that any of their assets would become unprofitable in this way, although they did acknowledge the issue.
"We have to respect the 2°C target, and at the same time we have to respect the demand of developing countries," said Eni chief executive Claudio Descalzi.
Dudley said he had met Bank of England governor Mark Carney to discuss the issue of stranded assets earlier this week and pointed out that the transfer to a 2°C world would mean "a long period of transition." It is "unrealistic" to think that any change would happen quickly, he said.
The chief executives of BG and Repsol, Helge Lund and Josu Jon Imaz, both underlined the importance of the practical interim solutions suggested in the OGCI's accompanying report, in particular replacing coal-fired generation with gas, improving energy efficiency, and further developing carbon capture and storage (CCS) technology.
None of the companies have committed to any new climate targets as part of the initiative, although they have been co-operating to develop common monitoring, reporting and verification (MRV) standards. OGCI members said they have collectively reduced their emissions by 20pc over the past 10 years.