Much of the airtime in the energy industry to lower emissions has been centred on international oil companies (IOCs). Yet, national oil companies (NOCs) account for the largest proportion of absolute upstream emissions, and whether the energy transition can succeed will depend in large part on the behaviour of the world's NOCs – the leviathans of the global energy ecosystem.

It is ill-wise to club NOCs monolithically. At the one end of the spectrum, are professionally run entities that are among the world's most sophisticated oil and gas operators, with industry-leading technologies and engineering capacities, strong balance sheets as well as being well-seasoned in managing complex mega-projects. At the other extreme, are NOCs that are little more than pass-through entities, with limited human capital, weak technical capabilities and lacking financial independence.

Yet, a commonality amongst NOCs is that they are instruments of the state and to understand which NOCs will succeed in the journey to net zero, it is important to decipher the principles and optimisation strategies of what states want from their NOCs. Thus, to contextualise their journey to net zero, necessitates a deep comprehension of each NOC's corporate positioning, responsibilities, capacity, role in the global economy, partnerships, state influence within which they operate and ambitions to pivot from “big oil" to “big energy".

As NOCs have a track record of building and scaling up global energy supply by leveraging their unparalleled access to competitive natural resources and capital, we assume that they can fill an investment gap left by ESG-induced, capital constrained IOCs. What is clear is that NOCs will follow different pathways in the energy transition and their the evolution will have significant reverberations for the energy trilemma – affordability, security and sustainability – over the long-term (see here).

Looking ahead, the journey to net zero will involve trade-offs between long-term goals and short-term realities. It could be a serpentine path, full of setbacks and adjustments. There is no set, predefined solution to the net zero equations and there are many critical questions that need to be addressed and hundreds of solution elements to be considered and clubbed collectively. Whilst the net zero equation is not yet solved, what is apparent is that the world-class engineering capabilities, sheer scale and execution skills that most NOCs have to offer, positions them propitiously for the energy transition.

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