The Natural Resource Governance Institute (NRGI) has advised the Ghana National Petroleum Corporation (GNPC) to conduct a thorough risk analysis of its operations and activities in line with the global energy transition process.
It said a comprehensive transition approach is needed to address the impact of the energy transition on various stakeholders. To this end, it said GNPC as a national oil company (NOC) is expected to identify its risks, assess and analyse these risks and put in place a mitigation plan.
Furthermore, it will need to come up with an investment plan that takes into account the issues of energy transition such as the sustainability of the business as well as governance issues, says Senior Africa Programme Officer of the NRGI, Dennis Gyeyir.
Mr. Gyeyir who spoke in Accra during a stakeholder meeting to share the findings of a survey on how national oil companies (NOCs) are responding to energy transition, observed that many of the companies that have high readiness for the transition are companies located in Latin America like Ecopetrol of Columbia, Amex of Mexico and YPF of Argentina.
In addition to this, he said it is imperative to have ready scenario plans that will position the company to strategically respond to emerging market issues.
The survey covered 15 NOCs in sub-Saharan Africa, Latin America, the Middle East, and North Africa. The exercise among others, concluded that a few of the NOCs surveyed acknowledge the risk of energy transition, with fewer assessing risk and making these assessments public.
Also, it was found that some NOCs have mitigation plans, but it is unclear if they are based on risk assessments.
It is against these developments that Mr. Gyeyir posited that by embracing the energy transition and strategically adapting its operations, the GNPC will not only contribute to the country’s global climate goals but also secure its long-term viability.
He maintained that companies that want to thrive long-term — and their investors — should be looking out beyond oil and gas to low carbon emissions and other strategic anchors that will ensure sustainability.
The NRGI noted that NOCs play a crucial role in the global energy landscape, as they control significant reserves of oil and gas resources. However, as the world transitions towards a more sustainable and low-carbon future, NOCs, particularly new producers such as Ghana, are likely to face numerous challenges and opportunities,.
The NRGI in its survey advocated that NOCs diversify their portfolio, invest in research and development, improve efficiency in resource management, and improve transparency and reporting to achieve sustainable operations.
The study by the NRGI is aimed at highlighting gaps in planning around the risk of the global energy transition for NOCs in specific countries that can be used in advocacy efforts and promoting knowledge sharing of the approaches and strategies of different NOCs and their potential challenges.
It also sought to provide ideas on how better management of transition risk can be achieved in line with what other NOCs are doing as well as showing gaps in knowledge as well as good practices that can be better understood through the development of in-depth case studies.