Petroleum Financing Becomes More Selective Amid Global Energy Transition

Petroleum financing remains a crucial component of sustaining oil and gas development, supporting energy security, and converting hydrocarbon resources into productive assets.

However, the global energy transition is reshaping the landscape of petroleum financing, making it increasingly selective. Climate policies, environmental, social, and governance (ESG) considerations, and changing investor expectations are influencing how capital is allocated across the petroleum sector.

The availability and terms of financing can significantly impact whether a project reaches a final investment decision and ultimately proceeds to commercial operation.

According to the Fossil Fuel Finance Report 2022, between 2016 and 2021, the world's 60 largest private-sector banks provided approximately $4.6 trillion in financing to fossil fuel companies, with about 91% classified as not project-related rather than directly tied to individual projects.

The International Energy Agency (IEA) estimated that global energy investment would reach approximately $3.3 trillion in 2025, with about $2.2 trillion directed toward clean energy technologies and infrastructure and $1.1 trillion toward oil, natural gas, and coal.