Strategic Planning of Oil and Gas Companies: The Decarbonization Transition

Abstract

In the face of increasing climate concerns and the intensive development of the renewable energy sector, oil and gas companies need to develop strategies to not only comply with the new rules of the game, but to also benefit from them. This study includes prospects for development of the global energy system along with analysis of decarbonization strategies for the largest players in the oil and gas market, and defines conceptual directions to improve strategic planning systems of oil and gas companies in order to ensure sustainability in the context of a global energy transition. The theoretical background of this study is based on the fundamental concepts and methods of strategic planning, as well as modern approaches to strategic planning in the oil and gas industry. This study makes three contributions. First, we maintain that a broad, systematic understanding of the consequences of energy system transformation and defining its role in the new market should be the crucial task of players in the oil and gas industry, and we clarify the opportunities and threats of transitioning to decarbonization. Second, the study results contribute to the development of the design theory of strategic planning systems by improving well-known methods and approaches with reference to global energy transformation. Third, we offer proposals for the development of a climate adaptation strategy using the example of a Russian oil and gas company based on the company’s business capabilities.