Carbon Tracker recently collaborated with global credit-ratings agency Standard & Poors to publish ‘What a carbon-constrained future could mean for oil companies’ creditworthiness’. This report assesses the fact that lower emissions levels will affect the price and demand for oil operators such that they run the risk of being downgraded. In particular, companies focused on the oilsands saw their ability to maintain dividends and capital investment impaired. Perhaps most significantly the scenario saw the fundamental business model of these companies called into question. The uncertainty regarding the economic viability of future production meant further CAPEX was no longer justifiable. Standard & Poors analysts discuss the analysis on its Credit Matters website.
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