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Positive E&P cash flows may be needed assuming a carbon price of $50/bbl
Apr 16:
What is the internal carbon price that an oil & gas company should take into account while contemplating a future E&P project.
8It is noticed that most companies are factoring in a price of $10 to $20 in terms of carbon price (Click on Reports here)
8But the global "fail-safe" that are now being taken into account is much higher, at $50/bbl
8To be able to remain viable in the medium to long run, oil companies have the twin challenge of hammering down breakeven price levels to as low as possible, preferably below the $30 mark while taking into account a much higher carbon price than they had bargained for the future.
8There is no other way but to take these hard parameters into account while trying to push a project through the capital approval process
8Eventually there is no alternative but to model project economics and NPVs around IEA’s New Policies Scenario, Current Policies Scenario, and the Sustainable Development
8Scenario (SDS). If the NPV does not pass IEA's first two scenarios if not the SDS, the project may have to be dropped
Click on Reports for more
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8It is noticed that most companies are factoring in a price of $10 to $20 in terms of carbon price (Click on Reports here)
8But the global "fail-safe" that are now being taken into account is much higher, at $50/bbl
8To be able to remain viable in the medium to long run, oil companies have the twin challenge of hammering down breakeven price levels to as low as possible, preferably below the $30 mark while taking into account a much higher carbon price than they had bargained for the future.
8There is no other way but to take these hard parameters into account while trying to push a project through the capital approval process
8Eventually there is no alternative but to model project economics and NPVs around IEA’s New Policies Scenario, Current Policies Scenario, and the Sustainable Development
8Scenario (SDS). If the NPV does not pass IEA's first two scenarios if not the SDS, the project may have to be dropped
Click on Reports for more
