Opportunity NOCs: How Investors Can Jumpstart Energy Transitions in National Oil Companies

The extent of investor exposure and the degree of investors’ potential influence over the fates of NOCs are far greater than investors themselves may perceive.

International oil companies, or IOCs, face increasing pressure from investors, regulators, and the broader public to reduce greenhouse gas emissions and accelerate the transition to clean energy. By contrast, investors, regulators and others have paid far less attention to national oil companies, or NOCs. These state-owned titans constitute half of the world’s oil and gas production, control two-thirds of global reserves, and often serve as the largest entities in their home economies. If the world is to meet the goals of the Paris Agreement, NOCs must begin decarbonizing their activities.

Despite the seemingly closed-off nature of many NOCs, investors will play a critical role in directing and incentivizing this energy transition. This brief shows that both the extent of investor exposure and the degree of investors’ potential influence over the fates of NOCs are far greater than investors themselves may perceive.