Alpha-Centric ESG Research

Kyle Rudden

Shortly after publishing <a href="https://www.smartkarma.com/insights/engine-versus-exxon-activist-hedge-fund-s-proxy-fight-win-reverberates-through-big-oil-boardrooms" target="_blank" data-smartkarma-citation="insights:52318" rel="noopener">Engine Versus Exxon: Activist Hedge Fund's Proxy Fight Win Reverberates Through "Big Oil" Boardrooms</a>, I decided that a follow-up report (such as this one) would be a good supplement. So, consider this an addendum of sorts to that first Insight.Whereas "Engine Versus Exxon" was a mostly qualitative discussion of recent events for Exxon and six other supermajors, this is a more data-driven look of a much larger universe of oil stocks; 50 in total, representing 24 countries (mainly in the Americas, Asia Pacific, and Europe).Together, they are a good proxy for the broader Energy sector – an aggregate market capitalisation of US$4.6 trillion, and responsible for an astounding 20.5 billion MtCO2e in emissions, about 65% of all energy-related greenhouse gas (GHG) emissions.This is a relatively focused Insight, covering four related areas:<ol>
<li>
Carbon Footprints: Scope 1, Scope 2, and Scope 3 emissions for each (ranked and sorted).</li>
<li>
Climate Policies: Where each stands vis-à-vis implementation of climate-related policies.</li>
<li>
Emissions Targets: Which companies are claiming to go net-zero emissions, and by when.</li>
<li>
Capital Investment: How future CapEx is (or is not) aligned with global warming targets.</li>
</ol>

Shortly after publishing Engine Versus Exxon: Activist Hedge Fund's Proxy Fight Win Reverberates Through "Big Oil" Boardrooms, I decided that a follow-up report (such as this one) would be a good supplement. So, consider this an addendum of sorts to that first Insight.Whereas "Engine Versus Exxon" was a mostly qualitative discussion of recent events for Exxon and six other supermajors, this is a more data-driven look of a much larger universe of oil stocks; 50 in total, representing 24 countries (mainly in the Americas, Asia Pacific, and Europe).Together, they are a good proxy for the broader Energy sector – an aggregate market capitalisation of US$4.6 trillion, and responsible for an astounding 20.5 billion MtCO2e in emissions, about 65% of all energy-related greenhouse gas (GHG) emissions.This is a relatively focused Insight, covering four related areas:

Carbon Footprints: Scope 1, Scope 2, and Scope 3 emissions for each (ranked and sorted).

Climate Policies: Where each stands vis-à-vis implementation of climate-related policies.

Emissions Targets: Which companies are claiming to go net-zero emissions, and by when.

Capital Investment: How future CapEx is (or is not) aligned with global warming targets.


Greenhouse Gas Emissions Profiles of 50 of the World's Largest Oil Companies

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief that global equities are in the early stages of a broad-based advance. We explore and highlight actionable investment themes and opportunities across the EM space and within materials, Energy, Manufacturing, Health care and Apparel/Luxury Goods

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief that global equities are in the early stages of a broad-based advance. We explore and highlight actionable investment themes and opportunities across the EM space and within materials, Energy, Manufacturing, Health care and Apparel/Luxury Goods

We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several international markets that are breaking out to new highs or making bullish inflections since our previous Int’l Compass (10/31/19). While developments continue to lean bullish, global equities have rallied substantially since the start of October, making it perfectly reasonable to expect some consolidation of recent gains which would allow for a more meaningful move higher.

We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several international markets that are breaking out to new highs or making bullish inflections since our previous Int’l Compass (10/31/19). While developments continue to lean bullish, global equities have rallied substantially since the start of October, making it perfectly reasonable to expect some consolidation of recent gains which would allow for a more meaningful move higher.

Global Equity Strategy: The Pause that Refreshes?

Global energy equity and oil & gas macro analyst

Anish Kapadia

Akap Energy

Thematic (Sector/Industry)

The volume of projects that have taken final investment decision this year has already exceeded most consultants forecasts from the beginning of 2019 and we are not done yet. AKap Energy remains confident that &gt;100 million tons per annum (mtpa) worth of new projects will go ahead in 2019. To put this in context 2018 global supply was ~320mtpa. So far this year &gt;60mtpa of new projects have been sanctioned with associated capex of &gt;US$50bn. Most recently the 20mpta Arctic LNG 2 project was sanctioned by <a href="https://www.smartkarma.com/entities/novatek-pjsc" target="_blank" rel="noopener" data-smartkarma-citation="entities:24004:1">Novatek PJSC (NVTK LI)</a> and in the US the 10mpta Calcasieu Pass project completed financing. We think it is highly likely that further projects get fully sanctioned by year-end, most notably Qatar's 32mtpa project and a 2nd mega project in Mozambique (see <a href="https://www.smartkarma.com/insights/economic-analysis-of-mozambique-s-lng-projects-huge-potential-but-financing-risks-remain" target="_blank" rel="noopener" data-smartkarma-citation="insights:29208">Economic Analysis of Mozambique’s LNG Projects: Huge Potential but Financing Risks Remain</a>).

The volume of projects that have taken final investment decision this year has already exceeded most consultants forecasts from the beginning of 2019 and we are not done yet. AKap Energy remains confident that &gt;100 million tons per annum (mtpa) worth of new projects will go ahead in 2019. To put this in context 2018 global supply was ~320mtpa. So far this year &gt;60mtpa of new projects have been sanctioned with associated capex of &gt;US$50bn. Most recently the 20mpta Arctic LNG 2 project was sanctioned by Novatek PJSC (NVTK LI) and in the US the 10mpta Calcasieu Pass project completed financing. We think it is highly likely that further projects get fully sanctioned by year-end, most notably Qatar's 32mtpa project and a 2nd mega project in Mozambique (see Economic Analysis of Mozambique’s LNG Projects: Huge Potential but Financing Risks Remain).

LNG Projects Update: >60mtpa Sanctioned and Likely to Far Exceed 100mtpa of FIDs in 2019

LNG prices have dropped to a seasonal low, as we flagged in our outlook piece for this year (<a href="https://www.smartkarma.com/insights/2019-energy-market-themes-stocks-with-exposure-focus-on-oil-refining-lng-m-a-renewables" target="_blank" data-smartkarma-citation="insights:27522">2019 Energy Market Themes &amp; Stocks with Exposure: Focus on Oil, Refining, LNG, M&amp;A &amp; Renewables</a>) but this hasn't dampened enthusiasm to push new projects forward (see <a href="https://www.smartkarma.com/insights/a-huge-wave-of-new-lng-projects-coming-in-the-next-18-months-positive-for-the-e-c-companies" target="_blank" data-smartkarma-citation="insights:27771">A Huge Wave of New LNG Projects Coming in the Next 18 Months: Positive for The E&amp;C Companies</a>). We continue to see this as positive for the LNG contractors and negative for the LNG developers. We discuss recent LNG prices, European LNG demand and the FID outlook including project updates from Venture Global, Alaska and Cyprus.

LNG prices have dropped to a seasonal low, as we flagged in our outlook piece for this year (2019 Energy Market Themes &amp; Stocks with Exposure: Focus on Oil, Refining, LNG, M&amp;A &amp; Renewables) but this hasn't dampened enthusiasm to push new projects forward (see A Huge Wave of New LNG Projects Coming in the Next 18 Months: Positive for The E&amp;C Companies). We continue to see this as positive for the LNG contractors and negative for the LNG developers. We discuss recent LNG prices, European LNG demand and the FID outlook including project updates from Venture Global, Alaska and Cyprus. 

LNG: What Matters This Week? Prices Fall Further in Asia but New Projects Continue to Progress

Portugal

Galp Energia, SGPS, S.A. is an integrated energy company with diversified activities Worldwide. The Company is focused in the prolific South Atlantic area, including Brazil's pre-salt Santos basin and the Angolan offshore, and in the world class Rovuma basin in Mozambique. Downstream activities are centred in Iberia and comprise the Refining & Marketing and the Gas & Power businesses.

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Galp Energia Sgps Sa (GALP PL)

Greenhouse Gas Emissions Profiles of 50 of the World's Largest Oil Companies

A quick overview of the carbon footprints and climate policies of 50 of the world's largest oil stocks (mainly Asia Pacific, Americas, and Europe...

Kyle Rudden

EM Breakout -- Add Exposure

The laundry list of current market conditions consistent with the profile of a bull market continues to grow, helping support our ongoing belief...

Vermilion Research

Global Equity Strategy: The Pause that Refreshes?

We continue to believe the weight of the evidence points to a new leg higher for global equities, a viewpoint that is supported by the several...

Vermilion Research

LNG Projects Update: >60mtpa Sanctioned and Likely to Far Exceed 100mtpa of FIDs in 2019

The volume of projects that have taken final investment decision this year has already exceeded most consultants forecasts from the beginning of...

Anish Kapadia

LNG: What Matters This Week? Prices Fall Further in Asia but New Projects Continue to Progress

LNG prices have dropped to a seasonal low, as we flagged in our outlook piece for this year (2019 Energy Market Themes & Stocks with Exposure:...

Anish Kapadia

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