Renewable Energy Sources in Decarbonization: The Case of Foreign and Russian Oil and Gas Companies

Abstract

The necessity of implementing the Sustainable Development Goals and solve the problem of climate change, technological progress and the conscious climate policy of many countries has led to the transformation of the world economy and power industry towards low-carbon development, which should be based on renewable energy sources. Oil and gas companies are actively criticized by the international community for contributing significantly to total anthropogenic greenhouse gas emissions, with emissions from hydrocarbon fuel combustion being the largest. In order to meet the tightening environmental requirements and regulations, oil and gas companies implement various initiatives for decarbonization and reducing the carbon footprint, including operating with renewables, whose scale, essence and variety depend on the decarbonization model. This paper attempts to identify, first, how renewable sources of energy have been integrated into the oil and gas companies; second, what decarbonization models are possible; and third, what the major determining factors in the formation of their decarbonization model and the scale of renewable usage are. Based on an extensive literature review, survey, websites and corporate sustainability reports of Russian and foreign oil and gas companies, models of decarbonization and the role of renewables in decarbonization are defined and the classification and interpretation of determining factors are offered, justifying their impact on the decarbonization model and the scale of renewable usage. The authors present an assessment of factors and prove the correlation between the factors under consideration and the scale and diversity of renewable usage by oil and gas companies, confirming the adequacy of the offered approaches.

1. Introduction

In 1992, at the Earth Summit in Rio De Janeiro, the UN Framework Convention on Climate Change [1] was signed by more than 180 countries and became the first step in the abatement of greenhouse gas emissions. Afterwards, the Framework Convention was extended by signing an agreement, binding participating states to reduce greenhouse gas emissions (Kyoto Protocol) [2], which later was replaced by the Paris Agreement under the UN Framework Convention on Climate Change [3]. Acceptance and ratification of the above-mentioned documents made a lot of countries, industries, and companies implement numerous initiatives for climate change mitigation and to minimize or prevent future negative impacts of CO₂ emissions. The energy sector is key to reducing overall carbon dioxide emissions, accounting for more than 70 per cent of total emissions [4,5]. The transformation of the global economy and energy towards low-carbon development suggests a decarbonization of the fuel and energy complex and a shaping of the energy mix [6,7]; therefore, since the beginning of the 21st century, there has been a growing focus on maximizing the use of alternative energy sources, especially in Organisation for Economic Co-operation and Development (OECD) countries [8,9]. However, due to the growth of energy consumption and other factors, despite the measures taken, no changes occur in the reduction of carbon dioxide emissions on a global scale [10,11]. According to a British Petroleum Statistical Review of World Energy [10], primary energy consumption in 2021 grew by 5.8 per cent over 2020 and by more than one per cent over 2019. As a result, carbon equivalent emissions increased by 5.7% in 2021 compared to 2020. Excluding the impact of the pandemic, carbon dioxide emissions have barely changed over the past few years.

In the structure of CO₂ emissions from the energy, the contribution of fuel resources (coal, oil and gas) varies over time and by region, with solid and liquid fuels predominating [5]. Oil and gas companies make a significant contribution to total anthropogenic greenhouse gas emissions, with emissions from the combustion of hydrocarbon fuels (Scope 3) being many times greater than the emissions from sources owned and operated by the company, as well as emissions from the production of electricity consumed by oil and gas companies (Scopes 1 and 2) [12]. However, if considered separately, coal takes the main share, about 40 per cent in 2021, in the structure of carbon dioxide by fuel type.

Supply disruptions of alternative energy in some regions of the world, such as exceptional weather situations and low levels of gas in European Union underground storage facilities at the end of 2021 [13,14] and the embargo of Russian fuel and energy resources in 2022 [15], have caused a significant turbulence in energy market. All this led to an increase in the consumption of coal as an alternative, economically viable [13], but the most environmentally unfriendly fuel, which now is a concern among ecological organizations around the world. Thus, according to the Ember climate think tank [16], coal-based power generation increased by 1.5 per cent to an estimated 16 per cent of European Union (EU) electricity in 2022.

As a result, the Global Carbon Project’s science team [11] predicts a further increase in CO₂ emissions to 40.6 billion tons (GtCO₂) in 2022, with oil and coal as the main contributors to the increase in emissions. If CO₂ emissions remain at 2022 levels, the carbon budget to limit global warming to 2 degrees will only be sufficient for 30 years [17], exacerbating the need of searching ways and means which provide low-carbon development [18].

As noted, the oil and gas complex is one of the largest producers of greenhouse gas emissions [5,19], while currently there are significant achievements in the way towards sustainability [20] and in the sphere of decarbonizing the production chain of hydrocarbons extraction and use [21]. Many major oil and gas companies set a goal of achieving carbon neutrality by 2050 and claim to be transforming themselves into energy companies. Studies show that the key options for decarbonization include [12,22,23] increasing gas production, reducing oil production, the transition to renewable energy sources (RESs) and low-carbon fuels, improving energy efficiency, rational use of associated petroleum gas (APG), the implementation of carbon capture, utilization and storage (CC(U)S) technologies; meanwhile, the scale and variety of options used, as well as the pace and extent of decarbonization decisions taken, vary within companies and depend on several factors [24]. Government regulators, investors, lending institutions, ecological organizations and society exert significant pressure on oil and gas companies, demanding to disinvest in traditional operations and reduce their carbon footprint, both in production process and in the use of their products [25].

Previously formed [26], as well as adjusted, forecasts of the world fuel and energy balance [27,28] assume a transition to low-carbon development, primarily by increasing the use of RESs and reducing coal consumption. However, in many forecasts [27,28], despite the reducing of the relative share of oil and gas in the structure of energy resources consumed, their absolute value will remain at a significant level, continuing to play an important role in providing the world community with energy resources.

The credibility of forecasts also confirms the fact that according to some experts [29], complete and rapid replacement of fossil fuels by RES, despite their minimal impact on the environment, is not possible due to the necessity of the effective policy incentives and policy control implementation [30], the increase in the production of rare earths elements [31,32,33], the existing technological problems of their storage, the dependence on climatic conditions and geography, as well as low efficiency in densely developed megacities and energy-intensive industries (mechanical engineering, metallurgy, etc.) [34,35].

Despite the criticism of oil and gas companies [36], the authors are of opinion that it is expedient to build the fuel and energy balance through an energy mix [37], where the aggregate s collectively take a larger share, while hydrocarbons consumption remains significant. In this regard, in the process of transition to low-carbon development, the focus should be primarily on the further decarbonization of oil and gas companies.

The oil and gas sector’s decarbonization has been actively discussed globally, and there are several lines of research on this issue.

The first line of the research is related to the study of options and directions, as well as the opportunities and barriers of oil and gas companies’ decarbonization. The experts of the McKinsey & Company consulting firm examine possible decarbonization options at different stages of hydrocarbon production and the sales chain (upstream, midstream, downstream), claiming that the problem of emissions in the oil and gas sector can be solved with existing technology. The main options for decarbonization include energy efficiency, CC(U)S technologies, replacement of equipment, electrification, methane capture, change fuel to biogas and hydrogen and others [23]. In the study [38], the author proposes an approach to investigate decarbonization options like seven pathways, which include a combination of several methods aimed at reducing emissions in Scope 1, Scope 2 and Scope 3. The author in detail focuses on the role of green and blue hydrogen, as well as biofuels, e-fuels and renewables in decarbonization. Steve Griffiths et al. explore technologies and practices; underline potential benefits, which are rising from the technological, organizational and institutional measures; investigate barriers for oil refinery decarbonization; as well as identify various factors that will affect their evolution [39]. The main value of the study is to provide information that will help stakeholders (policy makers, researchers, practitioners) apply the necessary tools to ensure the low-carbon transition of the refining industry. In the work “Decarbonization of Oil & Gas: International Experience and Russian Priorities” [40], the authors explore and analyze the climate goals and decarbonization strategies of leading international oil and gas companies and propose a classification of decarbonization options for Scope 1, Scope 2 and Scope 3 divided into six groups: operational methods, corporative strategy methods, effective monetization of methane and APG, CC(U)S technologies, low carbon energy sources and hydrogen use. In the works presented above, the structurization of selected options and directions of decarbonization is performed mainly by two criteria: the scope or stage of a technological chain, which leads to multiple mentions of different decarbonization options and makes it impossible to apply a universal terminological apparatus. The second line of the research is aimed at studying strategies for oil and gas companies’ decarbonization and the process of their transition to being carbon neutral [21,41,42,43,44,45]. Thus, Cherepovitsyn and Rutenko [41] analyze the strategy of major oil and gas companies on key decarbonization options and justify the need to change the system of strategic planning to hold key positions in energy markets. The main value of the study is to offer new approaches to the strategic planning of oil and gas companies for achieving carbon neutrality, and to develop a strategic map of climate adaptation for the Russian oil and gas company, PJSC “Lukoil”. Mahnaz Khorosani et al. [43] present the oil and gas supply chain and propose an approach in which key decarbonization strategies are considered in three stages of the O&G sector lifecycle: upstream, midstream and downstream. The authors claim that these strategies will lead oil and gas companies to carbon neutrality. At the final stage of the research the authors investigate correlations between decarbonization strategies and present their prioritization and categorization using the IF-DEMATEL procedure. Magnus C. Abraham-Dukuma [21] illustrates the emissions reduction and decarbonization target of oil and gas majors, explores a case study of the DONG Energy company and proposes an approach to transforming oil and gas companies from unsustainable to environmentally friendly. The author forms the basis for further theoretical and practical research, which may include the study of specific approaches to diversify the economy and individual companies to achieve carbon neutrality. Lu H [44] and the team of authors present carbon emission targets of nine major oil and gas companies and their results achieved in this sphere, paying special attention to low carbon investment. In their study, the authors propose three types of low-carbon transition paths, underline challenges and opportunities. Maria Morgunova and Katerina Shaton focus on the strategies of major oil and gas companies towards energy transition and present the results of structured questionnaire to understand whether the oil and gas industry is ready for the energy transition or not. One of the research questions is the question of what factors have the greatest influence on the strategic choices of companies; the authors assume that legislation and climate policy are decisive ones [45].

The third line of the research focuses on examining the application of specific decarbonization options to oil and gas companies, including the integration of renewable energy sources in the processes of production and use of hydrocarbons. Some studies related to renewable energy sources are targeted, focusing on the application of renewable energy sources in a particular region or fields with hard-to-recover reserves [46,47,48,49,50,51,52], or investigate the possibility of using hydrogen-like low-carbon fuel [53]. Other studies examine different energy strategies, the possibilities of using renewable energy in oil and gas production and investments in this sphere [54,55,56,57].

Matthias J. Pickl covers the process of transforming global oil and gas companies into energy ones, analyzes the renewable energy strategies and proposes criteria for their assessment. As a result, the author divides the oil companies into two groups and proves the connection between energy strategies and proven oil reserves [54]. Jarboui investigates the question of how the integration of renewables influences the operational and environmental efficiency of oil and gas companies. The main results of this empirical study suggest that renewable energy and biomass energy contribute to lower operating efficiencies and higher environmental efficiencies of oil and gas companies [55]. Ahmad Rafie and Kaveh Rajab Khalilpour present an overview of oil and gas extraction systems and renewable energy resources and technologies, underlining their advantages and disadvantages. The main contribution of the research is the analysis of how renewables are used in oil and gas activities [56]. The investment strategies of Statoil, Shell, Total SA, BP, Chevron, ExxonMobil and Eni to promote renewables are examined by Minjia Zhonga and Morgan D. Bazilian. The authors explore the motives for investments, present four common types of investments in renewables, investigate the challenges and provide some examples [57].

This literature review shows that the considered aspects of energy transition and applied decarbonization strategies, including the use of renewable energy sources, are sufficiently covered for some foreign companies but are practically absent for Russian companies. There are studies in the area under consideration, but their number is limited. For example, Vladislav Karasevich presents a description of ways to decarbonize Russian companies and outlines directions for their further low-carbon development [58]. Alexey Gromov discusses the decarbonization strategies of oil and gas majors and underlines possible lessons for Russia [59]. Alexey Ilyinsky et al. describe schemes and models of decarbonization, presenting an algorithm for the formation of the organizational and economic mechanisms of Russian oil and gas complex decarbonization [25].

In addition, most of the analyzed studies present possible decarbonization options, highlight the main ways of decarbonization and identify groups of companies depending on the intensity of renewable energy application. However, only a few studies partially raise the issue of identifying the factors influencing the scale and variety of different decarbonization options’ use, without justifying the reason why companies choose a particular decarbonization model.

In order to address the existing gap, the authors analyze corporate sustainability reports of a large number of Russian, as well as foreign, oil and gas companies in terms of the scale of using various decarbonization options, with a special focus on renewables. The objective of the present study is to investigate key factors of the RES application scale by oil and gas companies, and which should be considered while integrating RESs in the processes of production and use of hydrocarbons. To achieve this goal, the following research questions were raised:

RQ1: What is the role of hydrocarbons in the current and future global carbon dioxide emissions and world energy supply?

RQ2: What is the role of RESs in oil and gas companies’ decarbonization and what factors encourage the companies to use these sources?

RQ3: What could be the future directions of Russian oil and gas companies’ development in terms of renewable energy source use?

To answer the RQs, this research paper is organized as follows: firstly, the authors studied trends in energy and climate development, and present the structure of fuel and energy balance, predictions of its change and the contribution of fossil energy sources to global carbon dioxide emissions; secondly, the authors identified the role and direction of RESs in the production and consumption of oil and gas, then identified and evaluated the factors contributing to the introduction of renewable energy sources in oil and gas companies and, finally, presented the perspectives for using renewable energy by Russian oil and gas companies.

The main assumptions of the research are the following:

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The authors present the results of content analysis of company reports, as well as other information in the form of a summary of the use of decarbonization options and alternative energy sources by companies, but the authors do not insist that this list is complete, the authors present only the main directions;

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The authors claim to have identified a complete list of factors contributing to the decarbonization of oil and gas companies and use of alternative energy sources and that they are minimally related to each other, but some correlation certainly exists;

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Assessment of the role of RESs in the decarbonization of oil and gas companies and some factors contributing to the decarbonization of oil and gas companies and use of RESs is subjective in nature, and is made on the basis of open sources of information.

2. Materials and Methods

The structure of the research is the following:

• Studying energy and climate trends, main decarbonization options;
• Forming a list of foreign and Russian oil and gas companies to be analyzed according to a number of criteria;
• Identifying the climate target, main ways to decarbonize activities and the scale of renewable use by foreign and Russian oil and gas companies;
• Identifying the main types and areas, studying the accumulated experience in the use of renewable energy by oil and gas companies;
• Identification and analysis of factors contributing to the implementation of alternative energy sources by oil and gas companies;
• Determining further strategic directions of Russian oil and gas companies’ development in terms of renewable energy source use as one of the main options for decarbonization.

To study the main tendencies of power industry development, the decarbonization of the oil and gas complex, and directions, features and problems of RES use by the oil and gas sector, the following research materials were used:

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The Scientific literature of leading foreign and Russian researchers in highly ranked scientific journals such as Sustainability, Energy Research & Social Science, Energies, Energy, Energy Strategy Reviews, Energy Policy, Renewable and Sustainable Energy Transition and others;

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Websites, corporate sustainability reports of Russian and foreign oil and gas companies, forums and news on the subject under research;

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Analytical reports and outlooks of the International Renewable Energy Agency (IRENA), the World Energy Council, the International Energy Agency (IEA) and reviews and outlooks of foreign companies;

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The regulatory literature.

The key research methods included desk studies, content analysis, PLEOTS analysis, brainstorming and expert method.

As a preliminary study, a desk study based on an academic literature review was carried out. The authors highlighted energy and climate trends and presented the theoretical background of the research.

The authors created various search queries in the Science direct database using two groups of collocations related to decarbonization and RESs in oil and gas companies with a TITLE-ABS-KEY search. At first, the authors limited the search to a period of 7 years, beginning from 2016 after the Paris Agreement was signed, then the authors limited the search by subject area and, after that, the authors looked through each paper to choose the most appropriate articles.

At the next stage of the research, the authors formed a list of foreign and Russian companies to be analyzed, applying methods of mathematical statistics. The sample of Russian companies was formed based on such criteria as oil and gas production and revenues, legal form and independence from other oil and gas companies. The companies in the sample are the largest and represent public joint-stock companies. Such legal form provides the availability of various information about the company. As a result, the sample included the following companies: PJSC “OC Rosneft”, PJSC “Gazprom”, PJSC “Gazprom-neft”, PJSC “OC RussNeft”, PJSC “Surgutneftegas”, PJSC “Novatek”, PJSC “Lukoil”, PJSC “Tatneft” and PJSC “OC “Slavneft” (Appendix A).

PJSC “Gazprom-neft”, which is under the control of PJSC “Gazprom”, is included in the sample due to its different focus on hydrocarbon production, which affects the choice and variety of decarbonization methods used. The exclusion of PJSC “OC Bashneft” from the sample is due to its affiliation with PJSC “OC Rosneft” and unified development focus.

Foreign companies were selected based on their contribution to global production and strategic goals in achieving carbon neutrality. The sample included companies that are members of the Oil and Gas Climate Initiative (BP, Repsol, Royal Dutch Shell, TotalEnergies, ExxonMobil, Chevron, CNPC, Eni, Equinor, Petrobras, ExxonMobil, Saudi Aramco and Occidental), and together they control about 30% of global hydrocarbon production (

Table 1. OGCI oil and gas production indicators in 2021.

Indicator	2021
OGCI oil production, Mboe/year	10,074
OGCI oil and gas production, Mboe/year	15,987
Total world oil production, Mboe/year	32,777
The share of OGCI in total production,	30.7

Source: created by the authors based on [10,60].

).

After forming the list of foreign and Russian companies, the authors carried out a content analysis of corporate sustainability reports and websites to understand how the aforementioned companies are moving to low-carbon emission, whether they have made progress in achieving carbon neutrality and what the main decarbonization options and the role and plans for using alternative energy sources are.

Then, for identifying the type and areas of using RESs by oil and gas companies, the authors systematized and generalized information from different sources (academic articles, corporate reports, websites, news and forums).

The authors used brainstorming, combining questionnaire-based expert method and PLEOTS analysis, to identify and classify the factors contributing to the decarbonization of oil and gas companies and the treatment of alternative energy sources. At the first stage of brainstorming, the authors and 15 invited experts individually proposed a list of factors, dividing them into political and legal, economic, organizational, technological and social-cultural categories according to PLEOTS analysis—the modified version of classical PEST analysis [61]. The authors used a documentary method that considers socio-demographic characteristics while selecting experts. The selection criteria included specialization and professional affiliation, work experience, academic degree and scientific publications. The experts were representatives of oil and gas companies, as well as representatives of Russian universities and research centers and were surveyed via e-mail.

Then, as the second stage of the brainstorming, the results of the previous step were processed and the factors were systematized, analyzed and generalized.

Finally, the authors assessed the effect of the factors on each of the companies considered, identified the main decarbonization models of oil and gas companies and determined the future strategic directions of Russian oil and gas companies’ development.

3. Results

3.1. The Prospects for Reducing Carbon Dioxide Emissions

Over the past few decades, the world community has been concerned about climate change [62,63], which, according to many scientists and experts, is caused by emissions of greenhouse gas into the atmosphere, including carbon dioxide [64,65]. Therefore, since the end of the 20th century, various documents [1,2,3] have been adopted, which set the goal of reducing emissions and stabilizing the concentration of greenhouse gases in the atmosphere at a necessary level. The Paris Agreement on Climate, ratified by many countries of the world, sets a limit temperature rise of 2 degrees while striving for a limit of 1.5 degrees, which requires a reduction of global anthropogenic emissions by 40–60% of the 1990 level. The signing and ratification of various climate documents has led to a significant increase in initiatives aimed at decarbonizing (reducing carbon footprint) industry in many countries and regions of the world.

However, according to [5], the total global carbon dioxide emissions from energy sources, gas flaring, cement and other industries reached the maximum in 2021 and amounted to 37.12 billion tons (Figure 1). There was a decrease in carbon dioxide emissions in 2020 compared to 2019, but it was not due to economic and energy decarbonization measures but because of a decline in economic activity in most of the world as a result of restrictions during the COVID-19 pandemic. According to the forecast data provided by Global Carbon Project scientific group, in 2022 the total amount of carbon dioxide emissions in the atmosphere increased and exceeded the value of 2019.

Global warming experts believe that greenhouse gas emissions may also increase in the future, making it necessary to enhance action in combating climate change. The main reason for the increase in carbon dioxide emissions is fossil fuel management, the growing demand for which is increasing as the economy recovers and functions normally. Coal, gas and oil are the main sources of carbon dioxide emissions, shares of which in the structure of total emissions have not changed significantly in the last few years (Figure 2). At the same time, oil and gas together account for most of the emissions (about 60%); however, when viewed separately, coal has been the main contributor to global carbon dioxide emissions for many years.

Of the total emissions in 2021 (37.12 billion tons), the bulk comes from fossil-fuel-producing countries (Figure 3); meanwhile, considering population, Saudi Arabia, Australia and the United States have the highest emissions per person among the countries represented (Figure 4).

In 2022, estimated emissions from oil and coal will exceed 2021 levels, and oil will be the main contributor to this increase.

In the current situation, the main goal of the Paris Agreement is quite elusive. If emissions over the next 9 years remain at 2022 levels, the remaining emission reserve for a global temperature increase of 1.5 degrees will be exceeded. Achieving carbon neutrality by 2050 requires reducing carbon dioxide emissions to 2020 levels.

3.2. The Prospects for Renewable Energy Sources

The need to address the issue of global carbon dioxide emissions requires even greater efforts to transform the world economy and energy towards low-carbon development, the basis of which should be RESs.

In Russian legislation, the definition of renewable energy sources is fixed in the Federal Law of 26 March 2003, No. 35-FZ “On Electric Power Industry” [66]. The definition of renewable and alternative energy sources (with reference to No. 35-FZ) is given in Russian State Standard GOST “Renewable and Alternative Energy Sources” [67]; other documents do not provide a different definition of these concepts. Thus, the main renewable energy sources include solar energy; wind power; water energy; energy of tides; waves and water bodies; geothermal energy; low-potential thermal energy of land, air, water, biomass, production and consumption wastes; and biogas. A characteristic feature of renewable energy sources is their conditional inexhaustibility, or the ability to restore their potential in a short time. However, if the essence of renewable energy sources undergoes critical examination, some of them, in fact, appear to be non-renewable. The directive of European Parliament and the Council on Renewable Energy [68], the International Renewable Energy Agency [69,70], defines renewable energy as energy from renewable non-fossil sources. Legislation in the U.S. and Canada emphasizes the naturalness of renewable energy sources. In statistical reports, companies report hydropower separately and it is not included in the group of renewable energy sources.

RESs are alternative energy sources in which the energy is not produced from fossil fuels and includes nuclear energy and renewable energy.

Despite significant progress achieved by the world community in using alternative energy sources, their share in the global energy balance is not very significant. According to the BP Statistical Review of World Energy 2022 (Figure 5), in 2020 the share of energy from renewable sources was only 6.1%, with RESs accounting for only 17%. In 2021, the structure of the global fuel and energy balance has not changed significantly, and the share of renewable energy increased by only 0.55% [10].

Among the main factors that restrain the rapid development of RESs, the following ones may be highlighted: the dependence on geography and climatic conditions, the relatively high price of electricity produced by some alternative sources, some unsolved technological problems such as integration into energy-intensive production sectors, accumulation and uninterrupted supply, and others. A rapid increase in the share of RESs is also problematic due to the constant demand growth for energy resources.

According to most of the earlier, as well as adjusted, forecasts of international agencies and companies, energy consumption is expected to increase in the long term. McKinsey [71] and TOTAL [28] predicted energy demand growth of 14–15% by 2050, and the IEA [27] predicted global energy demand growth of 2–7%, depending on the scenarios presented. Along with that, the Reuters 2021 forecast [72] expects a significant 1.5 to 2 times increase in energy demand by 2050.

All of the forecasts reviewed note a decrease in traditional energy source consumption and their replacement by renewable ones. Nevertheless, in projections of the global fuel and energy balance structure, the role of gas and oil, even by 2050, will still be significant in both absolute and relative terms (Figure 6).

Despite the fact that the climate agenda dictates a necessary transition to RESs and due to the inability to completely replace fossil fuels with low-carbon energy sources for many reasons, the development of hydrocarbon deposits will remain relevant for many decades to come. Along with this, there is a gradual transition from the production of readily available hydrocarbons to hard-to-recover ones, which cause even more negative environmental impact, increase carbon dioxide emissions and make it necessary to implement further and more extensive initiatives in the sphere of decarbonizing oil and gas companies.

3.3. Decarbonization of Oil and Gas Companies: The Role of RESs

The scientific literature distinguishes numerous decarbonization options, which can be classified in different ways. Summarizing the scientific research, the authors suggest systematizing the existing decarbonization options depending on the effect made on the volume and concentration of CO₂ in the atmosphere. In this regard, decarbonization options can be aimed at: 1. preventing CO₂ from entering the atmosphere (potential emissions may occur); 2. reducing the amount of CO₂ generated by the activity (emissions will not occur at the amount previously recorded); and 3. reducing the concentration of CO₂ in the atmosphere (Figure 7).

Among the main options to prevent carbon dioxide from entering the atmosphere are CC(U)S initiatives, the management of APG and industrial wastes and measures to prevent leaks. If these methods are not applied, carbon dioxide can enter the atmosphere at different stages of the technological chain of production and through the consumption of hydrocarbons. The International Energy Agency considers CC(U)S technologies as the most promising for achieving climate goals.

Today, the pace for CC(U)S technologies’ spreading remains at a low level due to significant capital investments and high operating costs. Nevertheless, it is already possible to talk about economies of scale and the reduction of unit costs at a number of sites.

Long-standing decarbonization options include the utilization of APG and production wastes, such as drilling cuttings, in which APG and drilling cuttings are injected into the reservoir to enhance oil recovery. At the same time, if APG is used to electrify the company’s facilities, according to the authors’ approach, it is considered a low-carbon fuel use.

The main decarbonization options aimed at reducing the amount of CO₂ generated by operations include a wide range of energy efficiency measures, including both technological (modernization and replacement of equipment, reuse of resources) and organizational measures (environmental monitoring, energy management, reorganization of production processes); production and/or use of RESs; use of low-carbon fuel and changing projects’ portfolios by refusing to participate in high-carbon projects and including more gas production and handling projects.

Reduction of CO₂ concentrations in the atmosphere can be achieved through reforestation projects, as well as by using BECCS (bioenergy using carbon capture and storage technology) and DACCS (direct air carbon capture and storage).

The accumulated experience, scale and list of decarbonization options vary depending on the environmental policy in the country of presence and the decarbonization strategy adopted by the company. For example, BECCS and DACCS are technologies of the future, while foreign and domestic companies have already accumulated considerable experience in applying various energy efficiency, APG and waste management methods.

Some RESs, such as wind power, solar energy, hydropower and others, have been actively used for decades by various industries, including the oil and gas sector. Along with this, new technological solutions, the climate agenda, the volatility of oil and gas prices and environmental policies make it possible and necessary for oil and gas companies to integrate alternative energy sources more extensively into their operations.

To determine the main options of decarbonization in use and establish the role of RESs in achieving low-carbon development, as well as the possible directions of their use at the stages of the technological chain of production and use of hydrocarbons, the authors analyzed the activities of Russian and foreign oil and gas companies. The results of the analysis are presented in

Table 2. Renewable energy sources (RESs) in decarbonization of Russian oil and gas companies.

Company	Climate Target to Reduce Emissions	Main Decarbonization and Carbon Footprint Reduction Options (Current and Planned)	Existing and Planned Projects for the Use of RESs	The Role of RESs in Decarbonization
PJSC “OC Rosneft”	By 2035, reduction of absolute greenhouse gas emissions (Scope 1 and 2) by more than 25%, by 2050—achieving carbon neutrality	Improving energy efficiency, rational use of APG and waste, CC(U)S technologies (evaluation of prospects), use of RESs for own needs and sale, leak reduction, increase in gas production	(SPP* + WPP* for own needs, production of low-emission products (evaluation of prospects)	Insignificant
PJSC “Gazprom”,	By 2030, reduction in greenhouse gas emissions by Scope 1 by 11.2%	Improving energy efficiency, rational use of APG, use of RESs for own needs and sale, increase in gas production	Hydrogen initiatives for own needs and sales (Gazprom Hydrogen LLC was created), SPP and WPP for own needs	Insignificant
PJSC “Gazprom-neft”	By 2030, reduction in carbon intensity and reduction in emissions by a third compared to 2019	Improving energy efficiency, rational use of APG, use of RESs for own needs (point use), production of low-emission products, increase in gas production	SPP for own needs, Solar-powered gas station Geothermal energy (foreign facility), WPP + SPP (evaluation of prospects)	Insignificant
PJSC “OC “RussNeft”	By 2030, reducing greenhouse gas emissions by 10%	Improving energy efficiency, rational use of APG, reforestation, CC(U)S technologies	No data	No data
PJSC “Surgutneftegas”	By 2030, reducing greenhouse gas emissions	Improving energy efficiency, rational use of APG, use of gas purification plants, use of RESs for own needs, reforestation	SPP for own needs	Insignificant
PJSC “Novatek”	By 2030, reduction of specific emissions of pollutants into the atmosphere by 20%	Improving energy efficiency, rational use of APG, CC(U)S technologies, leak management, increase in gas production, use of RESs for own needs and sale, reforestation	SPP, WPP and SHPP* for own needs, Purchase of energy from renewable, WPP (evaluation of prospects), Hydrogen and ammonia initiatives	Significant
PJSC “Lukoil”	By 2050, reduction of greenhouse gas emissions (Scope 1 and 2) by 20%, achievement of net zero controlled emissions	Improving energy efficiency, rational use of APG, use of RESs for own needs and sale, CC(U)S technologies (evaluation of prospects), reforestation, increase in gas production	SPP for own needs and sale, WPP for sale, Hydro energy for own needs and sale, Hydrogen initiatives, Biofuel production	Significant
PJSC “Tatneft”	By 2050, achieving carbon neutrality in terms of controlled emissions (Scope 1 and 2)	Improving energy efficiency, rational use of APG, use of RES for own needs, CC(U)S technologies (evaluation of prospects), reforestation, increase in low-carbon production	WPP, SHPP, SPP (evaluation of prospects), SPP and SHPP for own needs	Insignificant
PJSC “OC “Slavneft”	Systematic increase in the level of environmental and industrial safety of production	Rational use of APG, reforestation, increase in natural gas production	No data	No data

* SPP—solar power plant, WPP—wind power plant, SHPP—small hydroelectric power plants. Source: created by the authors, based on [74,75,76,77,78,79,80,81,82].

and

Table 3. Renewable energy sources (RESs) in decarbonization of foreign oil and gas companies.

Company	Climate Target to Reduce Emissions	Country	Main Decarbonization and Carbon Footprint Reduction Options (Current and Planned)	Existing and Planned Projects for the Use of RESs	The Role of RESs in Decarbonization
BP	By 2050, reduction of GHG emissions; net zero extraction and production	UK	Improving energy efficiency, use of RESs for own needs and sale, installation of new methane measurement system, oil production reduction, CC(U)S technologies	WPP for own needs and sale, SPP for own needs and sale, bioenergy production, hydrogen initiatives for own needs and sales, e-mobility program	Defining
Royal Dutch Shell	By 2050, establishment of a zero-emission energy business	UK, the Netherlands	Improving energy efficiency, production of low-emission products and ecological fuel, use of RESs for own needs and sale, oil production reduction, CC(U)S technologies, rational use of APG	WPP for own needs and sale, SPP for own needs and sale, biofuels production, hydrogen initiatives for own needs and sales	Defining
TotalEnergies	By 2050, introduction of renewable energy in the amount of production would be 50%, decarbonized energy—25% and the rest is natural gas	France	Improving energy efficiency, use of RESs for own needs and sale, oil production reduction, CC(U)S technologies, low-carbon refining processes	SPP for own needs and sale, WPP (onshore and offshore) for own needs and sale, bioenergy and biofuels, geothermal energy for own needs and sale, hydrogen (green and blue) initiatives, e-mobility program	Defining
ExxonMobil	By 2050, achieving zero GHG emissions at all operated assets	USA	Improving energy efficiency, use of RESs for own needs and sale, CC(U)S technologies, oil production reduction	Hydrogen initiatives for own needs and sales, algae biofuels production	Significant
Chevron	By 2028, emissions will be reduced by more than 35% compared to 2016. Achieving zero net emissions by 2050 (Scope 1 and 2)	USA	Improving energy efficiency, use of RESs for own needs and sale, CC(U)S technologies, oil production reduction, rational use of APG, reducing the carbon intensity of fuels	SPP for own needs and sale, hydrogen initiatives for own needs and sales, biofuels for own needs and sale, geothermal energy for own needs	Essential
CNPC	Reduction of CO2 emissions in the production process	China	Improving energy efficiency CC(U)S technologies, use of RESs for own needs and sale, increase in gas production	Hydrogen initiatives for own needs and sales, geothermal energy for own needs, WPP and SPP for own needs and sale	Essential
Eni	Absolutely zero emissions of greenhouse gases and decrease in their concentration to 2050	Italy	Improving energy efficiency, CC(U)S technologies, rational use of APG, low-carbon refining processes (biorefineries), use of RESs for own needs and sale	SPP and WPP for own needs and sale, hydrogen (blue and green) initiatives for own needs and sale, e-mobility program	Defining
Equinor	By 2030, net 50% emission reduction. By 2050, 100% reduction in GHG emissions at Scope 3	Norway	Improving energy efficiency, use of RESs for own needs and sale, rational use of APG, CC(U)S technologies, investing in renewables and low-carbon solutions, electrification initiatives	WPP (onshore and offshore) for own needs and sale SPP for own needs and sale hydrogen (blue and green) initiatives ammonia (blue) initiatives	Defining
Occidental	By 2040, achievement of net zero GHG emissions	USA	Rational use of APG, CC(U)S and DACCS technologies, use of dual-fuel and electric rigs	SPP for own needs	Significant
Petrobras	Achieve carbon neutrality to 2050, and by 2030 reduce emissions about 30%	Brazil	Low-carbon refining processes, use of RESs for own needs and sale, rational use of APG, CC(U)S technologies, increase in gas production	Biofuels for own needs and sale, investing in renewables (hydrogen and WPP), low carbon products and CCUS	Significant
Repsol	By 2030, net 30% reduction of emissions in Scope 1, 2 and 3 By 2050, achievement of net zero GHG emissions	Spain	Improving energy efficiency, increasing low-carbon generation, use of RESs for own needs and sale, increasing in natural gas production, CC(U)S technologies, rational use of APG	SPP for own needs and sale, WPP for own needs and sale, geothermal energy for own needs and sale, hydrogen initiatives for own needs and sale, biofuels for own needs and sale, e-mobility program	Defining
Saudi Aramco	By 2050, achievement of net zero GHG emissions (Scope 1 and 2)	Saudi Arabia	Improving energy efficiency, rational use of APG, use of RESs for own needs and sale, increase in natural gas production, low-carbon fuels production, CC(U)S technologies	Hydrogen and ammonia initiatives for own needs and sale, Investing in renewables (SPP), low-carbon fuels for own needs and sale	Essential

Source: created by the authors, based on [83,84,85,86,87,88,89,90,91,92,93,94,95].

. The main sources of information were annual reports, sustainability reports, websites of oil and gas companies and news. The detailed description of the selection process for both foreign and Russian companies is presented in the Materials and Methods section.

The table does not provide an exhaustive list of decarbonization options, but only the most relevant for companies according to the latest published reports.

In determining the role of RESs in decarbonization, the authors identified four possible categories: defining, essential, significant and insignificant. If a company has considerable experience, as well as a wide range of different projects on the use of alternative energy sources in its activities, in this case the role of alternative energy is determinative. If the company has ongoing or planned one-off, narrowly focused projects with small production capacity to use alternative energy sources in its activities, the role is insignificant.

The role of RESs in decarbonization is a determining factor for European companies, which have accumulated substantial experience in the use of solar and wind energy. Meanwhile, these companies expand the list of projects and areas of RES use when possible. Recent years have seen a significant increase in investment in renewable energy projects, including in the segment of offshore wind generation. Today, all European companies considered setting ambitious goals to take key positions in the hydrogen market, and some of them in the ammonia market as well.

Other foreign oil and gas companies under consideration also actively use RESs as decarbonization options, with hydrogen initiatives being present in the focus of their interests. Nevertheless, these companies are inferior to European companies in terms of the scale and experience of using RESs in their operations.

Russian oil and gas companies are not very active in the use of RESs; the main role in decarbonization is given to traditional methods, such as the utilization of APG and waste, handling leaks and improving energy efficiency. The number of green energy projects is not significant compared to the number of projects of foreign companies. Currently, Russian companies are implementing small projects to develop RESs for their own needs. However, the implementation of hydrogen initiatives is a strategic goal for the development of some companies.

The analysis revealed that the treatment of RESs occurs in oil and gas companies in three main directions: 1. use at hydrocarbons production and sales stages; 2. integration into the production chain to produce low-carbon fuel; 3. diversification of the asset portfolio through the production of renewables (water, solar, wind, bioresources, etc.) as well as other alternative energy sources (hydrogen initiatives, ammonia initiatives), including through changes in the structure of output. Production processes can be supplied with energy from renewables alone, or they can be supplied by hybrid energy supply systems. The use of RESs in the production processes can be carried out both at the expense of their local- and large-scale projects, and at the expense of purchasing energy derived from alternative sources.

3.4. Factors Contributing to RES Using and Their Assessment

In order to determine why in some companies the role of RES is determinative and in others insignificant, the authors identified factors that contribute to the management of alternative energy sources. Appendix B presents the classification and interpretation of the factors, which are divided into political and legal, economic, organizational, technological and social. When interpreting the factors, the authors note their importance and role in encouraging companies to make decisions about the use of decarbonization options, including use of alternative energy sources. Obviously, each factor is important, but each has a different value, which was not taken into account by the authors, but the authors made an attempt to identify such factors that do not affect each other. The list of these factors was formed by the authors as a result of an expert survey and by brainstorming. The authors claim that in order to understand the model and directions of oil and gas companies’ decarbonization, it is reasonable to divide the factors into three groups:

• General, relevant within a separate country/region and inducing oil and gas companies to decarbonization in general.
• General, relevant within a separate country/region, but encouraging the use of certain or a number of decarbonization options.
• Different for companies in the industry and having a determining character for deciding on alternative energy sources use.

As a result of the analysis, the authors insist that:

-

The first group of factors makes it necessary and potentially promotes the use of decarbonization options.

-

The second and third groups of factors, depending on their action in a particular region on a particular company and on their interpretation, will affect the scale of applying decarbonization options, as well as the decarbonization model.

Next, the authors evaluated the influence of the factors of the second and third group on the companies under consideration to establish their relationship with the scale of application of alternative energy sources.

Since, according to the reports of PJSC “OC “RussNeft” and PJSC “OC “Slavneft”, they do not have any projects on the use of alternative energy sources in their assets, they were excluded from the evaluation.

The companies were evaluated by 10 factors on a scale of 1 to 3. If a factor had the most positive effect on the companies’ decision to use alternative energy sources, three points were assigned, otherwise one point was assigned.

The result of the evaluation of the factors is presented in

Table 4. The evaluation of the factors.

Company/Factor	1.2	1.4	1.6	1.7	2.2	2.3	3.2	4.2	4.3	4.4	Total	Role
PJSC “OC Rosneft”	1	1	1	1	1	1	2	1	1	2	12	Insignificant
PJSC “Gazprom”,	1	1	1	1	1	1	2	1	1	2	12	Insignificant
PJSC “Gazprom-neft”,	1	1	1	1	1	1	2	2	1	2	13	Insignificant
PJSC “Surgutneftegas”	1	1	1	1	1	1	1	2	1	1	11	Insignificant
PJSC “Novatek”	1	1	1	1	1	1	2	2	1	2	13	Significant
PJSC “Lukoil”	1	1	1	1	1	1	3	2	2	2	15	Significant
PJSC “Tatneft”	1	1	1	1	1	2	2	2	1	2	14	Insignificant
BP	3	3	3	3	1	2	3	2	3	3	26	Defining
Royal Dutch Shell	3	3	3	3	1	2	3	2	3	3	26	Defining
TotalEnergies	3	3	3	3	2	3	3	2	3	3	28	Defining
ExxonMobil	2	3	2	2	2	2	2	1	2	2	20	Significant
Chevron	2	3	2	2	2	2	2	2	3	2	22	Essential
CNPC	2	2	3	2	3	2	2	3	1	2	22	Essential
Eni	3	3	3	3	3	3	3	3	3	3	30	Defining
Equinor	3	3	3	3	3	3	3	3	1	3	28	Defining
Occidental	1	2	2	2	3	2	2	3	1	2	20	Significant
Petrobras	2	2	2	2	2	2	2	2	1	3	20	Significant
Repsol	3	3	3	3	2	2	3	3	3	3	28	Defining
Saudi Aramco	2	2	3	2	2	1	2	1	1	3	19	Significant

. The maximum final score, as suggested by the authors, was given to the companies with the greatest experience and scale of alternative energy use.

The results of the evoluation correlate with the results obtained earlier and presented in Table 2 and Table 3, but are not indisputable. The authors attribute this to the evaluation of not all the factors affecting the company, as well as to the narrowness of the evaluation scale.

The results obtained allowed to identify the main decarbonization models used by the companies under consideration:

• Transformation of oil and gas business into energy one through participation in various projects on production and marketing of alternative energy sources, parallel active use of alternative energy sources in different sectors of oil and gas business process chain. At the same time other decarbonization options are actively used depending on the conditions in each particular company.
• Diversification of business through participation in large-scale projects on production of low-carbon fuel (hydrogen, ammonia); parallel use of alternative energy sources in different sectors of the oil and gas business with an emphasis on increasing the share of energy derived from alternative sources. The main focus is on the application of other various decarbonization options.
• Participation in projects on production of low carbon fuel (hydrogen, ammonia) or the active use of alternative energy sources in different sectors of the technological chain of the oil and gas business with the emphasis on increasing the share of energy received from alternative sources. Other various decarbonization options are also actively applied.
• Participation/assessment of participation prospects in projects for production of low-carbon fuel (hydrogen, ammonia) and/or to-the-point use and assessment of prospects for using alternative energy sources in different sectors of the oil and gas business technological chain.

The use of decarbonization models 3 or 4 is typical for Russian companies.

3.5. The Directions of Russian Oil and Gas Companies’ Development Regarding the Use of RESs

The “Strategy of socio-economic development of the Russian Federation with low greenhouse gas emissions until 2050” outlines the need to reduce the carbon intensity of the national economy by more than half compared to the level of 2021 (which will allow the achieving of the level of the leading countries of the world, following the climate agenda). As shown by the analysis of Russian oil and gas companies, they are taking some steps to reduce the carbon footprint of production activities. At the same time, the main focus of Russian oil and gas companies is aimed at applying a variety of methods that improve energy efficiency, APG and waste recycling, reducing leaks and others. PJSC “Lukoil” actively uses alternative energy sources in its production activities, PJSC “Novatek” is rapidly developing this sphere and PJSC “Tatneft” has had some success. The state-owned company PJSC “Gazprom” takes an active part in pilot projects for hydrogen production, but only uses RESs to-the-point in the process of hydrocarbon production.

The main factors influencing the scale of decarbonization options and RESs are, according to the authors, political and legal ones, which create the necessary incentives and conditions, as well as limited hydrocarbon reserves and the location of the resource base outside the country.

The results obtained within the framework of the study allow the outlining of the directions for the development of Russian oil and gas companies with regard to the application of decarbonization methods and use of RESs:

• For some Russian companies (PJSC “Surgutneftegas”, PJSC “OC Rosneft”), due to the availability of hydrocarbon reserves, the concentration of assets within the country and the not-massive use of RESs, it is logical to focus further on reducing the carbon footprint of the products by improving energy efficiency, the utilization of APG and waste production, reducing leakage and so on. At the same time, for PJSC “OC Rosneft”, as well as for PJSC “Novatek”, the use of RESs at a number of facilities located in inaccessible regions is promising.
• For PJSC “Gazprom”, as one of the world’s largest energy companies on the one hand, and the main supplier of gas to the domestic market on the other hand, it is reasonable both to develop hydrogen initiatives for possible new market sales and reduce the carbon footprint of products through the to-the-point use of RESs and other options of decarbonization.
• For PJSC “Lukoil”, it is advisable to further increase the implemented projects on the use of RESs, both for its own needs and for sale.
• For companies with offshore projects, as well as projects in the Arctic and other hard-to-reach areas, it is promising to use renewable energy sources for the power supply of infrastructure facilities.

4. Discussion

The authors developed an approach to understand what role the RESs play in the decarbonization of Russian and foreign oil and gas companies as the main focus of the research. This approach is comprehensive and is presented for the first time.

To present this approach, the following results were received:

• The decarbonization and carbon footprint reduction options were systematized depending on the effect made on volume and concentration of CO₂ in the atmosphere to understand the place of RESs. This systematization differs from, but does not contradict, the approaches to defining the options of decarbonization presented in [12,23,41,56,73].
• For a few Russian and foreign companies, the main decarbonization options and the role of RESs were determined. This result differs from the previous ones [41,43,45,46,57,58,59] by considering a larger number of companies, as well as by systematizing the aspects considered in relation to Russian companies.
• The type and areas of using RESs by oil and gas companies were identified by summarizing information from the companies’ reports and the following papers: [43,46,48,49,50,51,52,54,55,56].
• The legal, economic, organizational, technological and social-cultural factors contributing to the decarbonization of oil and gas companies and the treatment of RES were identified. The authors argued that the list of factors is full and presented for the first time. At the same time, the result obtained does not contradict the studies where the authors, among the main factors, allocate proven oil reserves [46], legislation and climate policy [57]. However, the authors’ approach to the division of factors into groups is presented for the first time.
• Thanks to the evaluation of some factors, the correlation between the factors under consideration and the scale and diversity of RESs has been proven.
• As for practical implementation, the main decarbonization models used by the companies under consideration were revealed, as well as the directions of development of Russian oil and gas companies with regard to the uses of RESs were determined.

As for future research directions, the authors will focus on more careful assessment of all the revealing factors and try to forecast their influence on Russian oil and gas companies.

5. Conclusions

The rise in CO₂ emissions due to the recovery of industrial and economic activity as a result of the lifting of restrictions caused by COVID-19 and the further growth in the consumption of energy resources cast doubt on the feasibility of the Paris Agreement’s goal to stabilize the increase in global average temperature.

This shows the importance of measures taken by states, companies and the community as a whole to decarbonize the industry. At the same time, the main role in the global energy transformation should be played by RESs, the consumption of which has significantly increased in recent years, but their share in the world fuel and energy balance is still not significant.

The oil and gas industry is one of the largest emitters of carbon dioxide and other greenhouse gases, so further decarbonization of oil and gas companies, including through the integration of RES into production activities, is relevant.

This study analyzes the main decarbonization options and identifies the role of RESs in decarbonization of foreign and Russian companies, and as well identifies the factors contributing to the decarbonization of oil and gas companies and the treatment of RESs.

The results of the study provide the following conclusions:

European companies have considerable experience in the use of solar and wind energy in their activities, with a growing list of projects and areas of RES use every year. The role of RESs in the decarbonization of European oil and gas companies is decisive. The main goal of these companies is to actively participate in hydrogen and ammonia initiatives.

Oil and gas companies of the USA, China and others are also actively using RESs and are exploring opportunities to participate in hydrogen projects. Nevertheless, these companies are inferior to European companies in terms of the scale and experience of using RESs in their operations.

Most Russian oil and gas companies are at the initial stage of using RESs, the main role in decarbonization being performed by traditional methods.

The decarbonization model, and in particular the scale of use and operations with RESs, performed by foreign and Russian oil and gas companies under consideration depends on several factors. The analysis of these factors should become the basis for the future strategic solutions of those companies which on the one hand recognize the importance of focusing on low-carbon emission transition in order to maintain a significant position in energy markets, and on the other hand the aforementioned analysis can be used to forecast the further tendencies of using RESs as options for oil and gas industry decarbonization.

For more active use of RESs, it is necessary to develop political and legal factors that are under control of the state.