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By: BankTrack

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By: BankTrack

Contact:

For any feedback or questions on this page please contact us at climate@banktrack.org

Go to offshore oil and gas policy table Go to offshore oil and gas exclusion table

Offshore oil and gas

Offshore oil and gas refers to all exploration taking place at sea. Oil and gas can be extracted by drilling a borehole below the seabed and transporting the oil or gas to onshore facilities by either a pipeline or via oil/LNG-carrying ships. Offshore oil and gas production is more challenging than land-based installations due to rough seas, a lack of pre-existing infrastructure, and the need to anchor the platform to the seabed or keep it in place using GPS systems, called dynamic positioning. Drilling at sea is also very expensive – up to many hundred millions of US dollars per well – and can only be profitable when the oil or gas price is high. Recent exploration has opened new areas for offshore oil and gas drilling in Guyana, Suriname, the Mediterranean, and South Africa.

Drilling offshore for oil and gas is dangerous and several disasters have occured in the last decades, of which the blowout and oil spill of Deepwater Horizon in 2010 remains arguably the most dire example. But even when oil or gas spills do not occur, offshore operations have a negative impact. The drilling itself, its production water (which contains oil and suspended solids), and daily operations on the platform all negatively affect the environment. Finally, the costs of decommissioning an oil platform at the end of operations can cost up to a couple of hundred million US dollars per platform, which oil companies are often not willing to pay. As a consequence, companies often leave these platforms, or parts of them, to deteriorate.

Banks and offshore oil and gas

The severity of the climate crisis requires that banks must urgently take steps to disengage from financing all business activities and projects that continue the world's reliance on fossil fuels. Banks must therefore end support for all new offshore oil and gas projects and implement a full phase-out for financing offshore oil and gas, in line with the Paris climate agreement.

The biggest financiers of offshore oil and gas since the Paris Climate Agreement (2016-2021) are BNP Paribas (USD 36.5 billion), JPMorgan Chase (USD 35 billion) and Citi (USD 34.5 billion).

Bank policies on offshore oil and gas are assessed below. These assessments follow the methodology of our Banking on Climate Chaos 2022 report, published in March 2022. The details section in the table contains further detail on the exact scoring per bank, as well as an overview of relevant policies.

See here for banks' exposure to the offshore oil and gas sector during 2016-2021.

BankLast update

Country

Score

Ranking

Details

Agricultural Bank of China

2021-03-24

CHN

Laggard

ANZ

2021-03-24

AUS

Laggard

Bank of America

2021-03-24

USA

Laggard

Bank of China

2021-03-24

CHN

Laggard

Bank of Communications

2021-03-24

CHN

Laggard

Bank of Montreal (BMO)

2021-03-24

CAN

Laggard

Barclays

2021-03-24

GBR

Laggard

BBVA

2021-03-24

ESP

0.5

Laggard

BNP Paribas

2021-03-24

FRA

0.5

Laggard

Canadian Imperial Bank of Commerce (CIBC)

2021-03-24

CAN

Laggard

China CITIC Bank

2021-03-24

CHN

Laggard

China Construction Bank

2021-03-24

CHN

Laggard

China Everbright Bank

2021-03-24

CHN

Laggard

China Merchants Bank

2021-03-24

CHN

Laggard

China Minsheng Bank

2021-03-24

CHN

Laggard

Citi

2021-03-24

USA

0.5

Laggard

Commerzbank AG

2021-03-24

DEU

Laggard

Commonwealth Bank of Australia

2021-03-24

AUS

0.5

Laggard

Crédit Agricole

2021-03-24

FRA

Laggard

Crédit Mutuel

2021-03-24

FRA

2.5

Laggard

Credit Suisse Group

2021-03-24

CHE

Laggard

Danske Bank

2021-03-25

DNK

Laggard

DBS Bank

2020-03-01

SGP

0.5

Laggard

Deutsche Bank

2021-03-24

DEU

Laggard

DNB

2021-02-01

NOR

Laggard

DZ Bank

2021-03-24

DEU

Laggard

Goldman Sachs

2021-03-24

USA

0.5

Laggard

HSBC

2021-03-24

GBR

Laggard

Industrial and Commercial Bank of China (ICBC)

2021-03-24

CHN

Laggard

Industrial Bank of China

2021-03-24

CHN

Laggard

ING

2021-03-24

NLD

0.5

Laggard

Intesa Sanpaolo

2021-03-24

ITA

Laggard

JPMorgan Chase

2021-03-24

USA

Laggard

Jyske Bank

2021-02-01

DNK

Laggard

KBC

2021-11-03

BEL

Laggard

Lloyds Banking Group

2021-03-24

GBR

Laggard

Mitsubishi UFJ Financial Group (MUFG)

2021-03-24

JPN

Laggard

Mizuho

2021-03-24

JPN

Laggard

Morgan Stanley

2021-03-24

USA

0.5

Laggard

National Australia Bank (NAB)

2021-03-24

AUS

Laggard

Natixis

2021-03-24

FRA

0.5

Laggard

NatWest

2021-03-24

GBR

1.5

Laggard

United Kingdom

Profile

Score

Laggard

1.5

Last update: 2021-03-24

Explanation

Total: 1.5 points out of 18

1 point for a weak exclusion of offshore oil and gas projects: NatWest does not finance proojects involving exploration for new oil and gas reserves, which includes offshore exploration projects.

0.5 point for enhanced due diligence regarding offshore oil and gas companies: NatWest's prohibition on "lending to major Oil and Gas producers, unless they have a credible transition plan aligned with the 2015 Paris Agreement in place by the end of 2021" could be strengthened with further clarification on what Paris Alignment means to NatWest. In the meantime, this qualifies as enhanced due diligence for offshore oil and gas.

See: Policy scores Excel sheet

Relevant policies

Oil & gas sector policy

Bank policy

2020-07-31 00:00:00

Nedbank Group

2021-04-22

ZAF

Laggard

Nordea

2021-09-09

FIN

Laggard

Nykredit

2021-02-01

DNK

Laggard

OCBC

2020-03-01

SGP

Laggard

Ping An Bank

2021-03-24

CHN

Laggard

Postal Savings Bank of China

2021-03-24

CHN

Laggard

Rabobank

2021-03-24

NLD

Laggard

Royal Bank of Canada (RBC)

2021-03-24

CAN

Laggard

Santander

2021-03-24

ESP

0.5

Laggard

Sberbank

2021-03-24

RUS

Laggard

Scotiabank

2021-03-24

CAN

Laggard

Shanghai Pudong Development Bank

2021-03-24

CHN

Laggard

Shinhan Financial Group

2021-03-24

KOR

0.5

Laggard

Skandinaviska Enskilda Banken (SEB)

2021-02-01

SWE

Laggard

Société Générale

2021-03-24

FRA

Laggard

Sparebank 1 SR-Bank

2021-02-01

NOR

Laggard

Standard Chartered

2021-03-24

GBR

0.5

Laggard

State Bank of India

2021-03-24

IND

Laggard

Sumitomo Mitsui Banking Corporation (SMBC)

2021-03-24

JPN

Laggard

Sumitomo Mitsui Trust Holdings

2021-03-24

JPN

Laggard

Svenska Handelsbanken

2021-02-01

SWE

0.5

Laggard

Swedbank

2021-02-01

SWE

Laggard

Sydbank

2021-02-01

DNK

Laggard

2021-03-24

CAN

Laggard

Truist Financial Corporation

2021-03-24

USA

Laggard

UBS

2021-05-03

CHE

0.5

Laggard

UniCredit Group

2021-03-24

ITA

Laggard

Italy

Profile

Score

Laggard

Last update: 2021-03-24

Explanation

Total: 3 points out of 18

1 point for a weak exclusion of offshore oil and gas projects: UniCredit prohibits financing for ultra-deepwater oil and gas extraction projects, as well as "pipelines and other infrastructure SOLELY related" to ultra-deepwater oil and gas.

2 points for a weak exclusion threshold for offshore oil and gas companies: UniCredit requires new and existing clients to get ≤25% of their revenue from ultra-deepwater oil and gas. For existing clients above that threshold, they must have a plan to get below that threshold, to be evaluated annually.

See: Policy scores Excel sheet

Relevant policies

Arctic and Non-Conventional Oil & Gas Industry Sector Policy out of date

Bank policy

2019-11-27 00:00:00

private

United Overseas Bank

2020-03-01

SGP

Laggard

US Bancorp

2021-03-24

USA

1.5

Laggard

Wells Fargo

2021-03-24

USA

0.5

Laggard

Westpac

2021-03-24

AUS

Laggard

Explanation

The point-based policy ranking assesses bank policies in four ways:

1) Restriction on direct financing for offshore oil and gas projects.

None (0), weak exclusion (1), strong exclusion (3)

2) Restriction on financing for companies that expand offshore oil and gas.

None (0), weak exclusion (2), strong exclusion (4)

3) The bank’s commitment to phase-out financing for offshore oil and gas.

None (0), reduction (1.5), weak phase-out (3), strong phase-out (5)

4) The bank’s commitment to exclude companies active in offshore oil and gas above a certain threshold.

None (0), enhanced due diligence (0.5), weak exclusion threshold (2), strong exclusion threshold (5), full exclusion (6)

A bank can obtain a total of 18 policy points for its offshore oil and gas policy. Based on this score banks are then classified as laggards, followers, front runners or leaders.

Laggard

Follower

Front runner

Leader

0 - 4.5 points

5 - 9 points

9.5 - 13.5 points

14 - 18 points

Banks excluding finance for offshore oil and gas

A number of banks have already taken steps to fully or partially exclude offshore oil and gas projects or companies involved in offshore oil and gas operations from their investments. The table below lists banks that have taken such steps.

BankLast update

Country

Project

Company

Details

Crédit Mutuel

2021-03-24

FRA

Danske Bank

2021-03-25

DNK

Lloyds Banking Group

2021-03-24

GBR

NatWest

2021-03-24

GBR

Raiffeisen Bank International Group

2022-06-28

AUT

Austria

Profile

Project

Company

Last update: 2022-06-28

Explanation

Projects:

RBI prohibits financing for ultra-deepwater (>1.500 m) oil and gas extraction projects, as well as "pipelines and other infrastructure SOLELY related" to ultra-deepwater oil and gas.

Companies:

RBI Group requires new and existing clients to get <25% of their revenue from ultra-deepwater oil and gas. For existing clients above that threshold, they must have a plan to get below that threshold, to be evaluated annually and they must have an environmental management policy in place including a description how the organization minimizes the adverse impacts on water ecosystems associated with the sector activities (including destruction of natural land forms and the wildlife). The fulfilment will be evaluated annually. RBI Group will phase out companies producing more than 25% ultra-deepwater oil & gas until 2025 whenever RBI is aware of and has access to this information. RBI will make efforts to collect the respective information.

Relevant policies

Exclusion Policy on Oil & Gas

Bank policy

2022-06-30 00:00:00

Skandinaviska Enskilda Banken (SEB)

2021-02-01

SWE

UniCredit Group

2021-03-24

ITA

US Bancorp

2021-03-24

USA

Explanation

This table lists banks that have adopted a full ( ) or partial ( ) exclusion policy for offshore oil and gas projects and/or companies. Click on 'Details' for the rationale of this assessment for each bank.

Feedback welcome

Our policy assessments are always a work in progress and we very much welcome any feedback, especially from banks included in them. You can of course also contact us for more information on specific scores and the latest policy changes. Please get in touch at climate@banktrack.org.