The Hidden Half
Roadmaps for national oil companies in the energy transition
This research was commissioned by the Global Gas and Oil Network (GGON).
The below is an abridged version of the full research paper, which is available in English, Spanish and Portuguese.
“The companies that keep thinking of themselves only as oil producers may not remain relevant in forty years. Those that understand themselves as national energy and industrial platforms will have a much stronger chance of leading the next cycle.
We can now see that oil production does not guarantee stability. It can also create exposure to price volatility, fiscal dependence and geopolitical shocks.
Countries with sun, wind, water, food, minerals and industrial capacity will be at the centre of strategic competition. NOCs need to help their countries be on the right side of that transformation.”
Jean-Paul Prates, former Petrobras CEO, minority leader Brazilian Senate and CERNE Chair.
National oil companies control 55% of global oil and gas production and underpin dozens of national economies. As electrification and clean energy reshape global demand, they face compounding, existential fiscal risks. But almost none of them have a plan.
A rapid, just and equitable transition from fossil fuels to renewable energy cannot happen without action on NOCs. So the question is not whether to act, but how.
The Iran conflict has underscored the urgency. Oil and gas volatility and producer-country exposure are headline news. Governments of these countries are spending billions to shield households from runaway prices their own budgets also rely on. That increasingly visible, daily and undeniable contradiction is the strongest case yet that fossil dependence brings exposure, not security.
In April 2026, almost sixty countries, including major producers, gathered in Santa Marta for the first international forum dedicated to transitioning away from fossil fuels. The momentum witnessed is another indicator conversation is moving from whether extraction must decision to how to organise that decline. This will continue at COP31 in Antalya, and beyond.
In this context, this research gives governments the decision-making tools they need. It classifies 33 NOCs into five types for the first time, and maps a practical transition roadmap for each. Those who move first have a genuine leapfrog opportunity. Those who don't risk being left behind, and dragging their economies down with them.
NOCs control 55% of global oil and gas production and two-thirds of known reserves.
As the ‘hidden half’ of the global energy system, national oil companies should shift from defending fossil fuel rents to building long-term economic resilience.
A rapidly shifting context
NOCs are facing a significant long-term threat from the global shift toward clean energy, yet none has a credible just transition strategy in place. This leaves them exposed on multiple fronts:
Structural Risks: Even under slow-transition scenarios, failure to act increases exposure to stranded assets, fiscal volatility, and social disruption.
Market Disruption: Global electrification — led largely by China's shift to electric vehicles — is structurally eroding oil and gas demand.
Energy Security: Many nations increasingly view the energy transition as a security strategy to reduce reliance on volatile, internationally traded fossil fuels.
Narrowing Options: Delayed or fragmented responses narrow future choices and increase the likelihood of unmanaged decline and fiscal stress — with the heaviest consequences falling on workers and communities.
Despite this, NOCs are collectively investing $425 billion in projects that only break even if climate policies fail. That is not a transition strategy, it is a compounding fiscal risk.
If redirected, this capital could accelerate the global transition and position countries that move early to leapfrog ahead. But that requires political will and sustained international collaboration.
A landmark assessment of national oil companies' exit plans by type.
Understanding and managing transition risks
No two NOCs are the same, and there is no one-size-fits-all solution.
Recognising this, WWF and GGON's report Roadmaps for Equitable Transitions of National Oil Companies (NOCs) presents a systematic classification of NOCs into five distinct types — from high-risk, fragile producers whose governments depend on oil for up to 93% of revenue, to potential frontrunners like Petrobras and Ecopetrol that have taken first steps but remain dangerously fossil-focused.
For each type, the research maps a practical strategy for reducing fiscal exposure and risk, building new sources of economic value and hedging against a new future in which renewable energy is the dominant market force.
The transition will not be equitable unless those with the greatest capacity move first and fastest. Governments must identify ways to support the most vulnerable governments to transition their NOCs.
"This is the first initiative I have come across that tries to organise the information for NOCs without prejudice."
Jean-Paul Prates, former Petrobras CEO, minority leader Brazilian Senate and CERNE Chair.
The five types of NOCs. The types are not fixed and any NOC can become a leader with political will.
The five types of NOCs. The types are not fixed and any NOC can become a leader with political will.
5 Types of NOCs
Each NOC has a unique context, strategic requirement and operational capabilities. This report thus sorts them into five archetypes — from high-risk producers in economically fragile states (Type A) to potential frontrunners with emerging climate commitments (Type E).
The result is a decision-making tool for company and government actors responsible for managing fiscal risk, energy security, social stability, climate and energy diplomacy and long-term development in a context of declining global fossil fuel demand and international agreements to transition away from fossil fuels.
Geographical distribution of the sample of 33 NOCs, according to the proposed typology.
Geographical distribution of the sample of 33 NOCs, according to the proposed typology.
Credible equitable transition roadmaps must plan for decommissioning stranded assets, reallocation of capital, and protecting workers and communities.
The following tables present tailored roadmaps associated with each type and indicative urgency levels for different actors. These roadmaps should be understood as reference frameworks rather than prescriptions. There's no one-size-fits-all solution, NOCs are not bound to a single category and may evolve or move between types over time.
Roadmap for Type A: High Exposure, Large Producers
High Exposure, Large Producer companies, have a window of opportunity to increase proactivity. They are highly vulnerable to fiscal income shocks, with a very high dependence on oil revenues and low efficiency, which limit their capacity and willingness to act. Moving toward an equitable transition would require exceptional effort and political reforms, along with strong international support.
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Actions to be carried out by NOCs |
Actions to be carried out by Governments |
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1. Reduce investments in exploration and exploitation of new oil and gas fields in line with risk assessment and energy transition plans. 2. Portfolio Shift outside NOC: Begin gradual reduction of high-cost fossil investments, converting assets into cash to invest in other economic sectors. 3. Climate Integration: Integrate transition criteria into corporate strategy and debt issuance, including climate risk analysis and just transition considerations. 4. Transparency Standards: Report climate-finance metrics under international disclosures (e.g., ISSB-S2/TCFD). 5. Strengthen accountability mechanisms to mitigate governance risk. 6. Formal Phaseout: Set an explicit production reduction and/or cessation goal (e.g., Phaseout 2040-2050). |
Most urgent and critical actions
Strategic actions |
1. Reform fossil fuel subsidies and increase fossil fuel taxes to maximize revenue, with measures to protect vulnerable businesses and households. 2. Stabilization Funds: Establish or strengthen sovereign wealth funds (SWFs) or stabilization funds, financed by fossil revenues, to generate long-term savings. 3. Prioritize Non-O&G economic diversification strategy outside the NOC: Prioritize public investments that effectively reduce the country's fiscal dependence on oil and gas production. 5. Reform institutional relationship between central government and NOC to align investment decisions with long-term national competitiveness. 6. Long term Industrial Policy: Implement national reforms to transfer remaining O&G rent into green industrial policy. |
Roadmap for Type B: Financially Constrained NOCs
Financially Constrained NOCs are located in countries with low-to-medium fiscal dependence from oil rents (except Nigeria and Algeria with considerable dependence), low efficiency, and high vulnerability. Without urgent reforms, their most likely pathway is to a failed transition, even with slow global decarbonization (STEPS). Their high fiscal dependence and critical financial conditions leave little room for half measures. If global decarbonization accelerates (such as in APS and 1.5-S), efforts to even pursue a pathway to a temporary transition illusion may be hard to sustain, and likely falling into the zone of failed transition.
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Actions to be carried out by NOCs |
Actions to be carried out by Governments |
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1. Evaluate alternatives for selling debt in international bond markets and converting assets into cash to invest in other businesses. 2. De-risking Portfolio: Wind down investments in exploration and development of new fields.
3. Establish a plan for phasing out high-carbon assets with clear decommissioning and remediation plans, ensuring financing for social and environmental repair. 4. Complete the decommissioning and liquidation of non-competitive assets. |
Most urgent and critical actions
Strategic actions |
1. Subsidy Reform: Implement schemes to reform domestic energy prices and phase out fossil fuel subsidies. 2. Assume a decision of no new licensing for risky developments. 3. Estimate the national production gap aligned with the 1.5 °C scenario and the total cost of phaseout to mobilize investments. 4. Plan the wind down and phaseout of O&G production in consensus with workers, affected communities, and value chains. 5. Implement legal reforms to promote economic diversification and set up or strengthen transition sovereign funds. 6. Prioritize public investments that effectively reduce the country's fiscal dependence on oil and gas production. |
Roadmap for Type C: Low Fiscal Dependence, High Energy Security Exposure
Low Fiscal Dependence, High Energy Security Exposure companies are moderately exposed. Their position as key players for energy security in their home countries makes them cautious and defensive, prioritizing stability over decarbonization. Their home countries face low fiscal dependence compared to the rest of types, and decent efficiency, but show moderate climate ambition, with some pledges on distant carbon neutrality targets and no public short or mid-term commitments.
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Actions to be carried out by NOCs |
Actions to be carried out by Governments |
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1. Redefine the NOC mandate to shift from a fossil-based company to a diversified energy security provider, electrification R&D leader, and/or biofuels leader. 2. Prioritize economic transformation models focused on electrification, energy security and demand decarbonization. Include unions, communities and cooperatives as co-owners of these initiatives. 3. Wind down investments in exploration and development of new fields. 4. Evaluate the benefit/cost of selling shares to capitalize and invest in the transition and the massification of technologies for electrification of demand. 5. Develop a strategy for financing decommissioning (strategic). |
Most urgent and critical actions
Strategic actions |
1. Implement schemes to reform domestic energy prices and phase out fossil fuel subsidies. 2. Accelerate decarbonization of national oil and gas demand. 3. Set up or strengthen transition sovereign funds to support economic diversification, the decarbonization of demand, and the just transition of workers and affected communities. 4. Remove legal or other regulatory barriers to NOC diversification (e.g. horizontal integration). 5. Establish energy transition mandates for the NOC, and diversify board members with climate and energy transition experts. 6. Promote community ownership of new businesses as part of diversification schemes for workers and affected communities. 7. Formulate and apply ambitious demand decarbonization plans, supported by substantial investment. |
Roadmap for Type D: Large Scale, Low-cost Producers
Most Large Scale, Low-cost Producers are powerful and efficient. Their size and low costs give them strength today, but also create uncertainty in levels of income if demand declines. With today's abundant resources and financing, they can support large-scale investments in immature and unproven solutions like carbon capture and storage while continuing fossil fuel expansion and market dominance under both STEPS and APS scenarios. The low break-even prices distort the short-term risk perception; however, their exposure significantly increases with rising global ambitions.
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Actions to be carried out by NOCs |
Actions to be carried out by Governments |
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1. Use windfall revenues to build stabilization and diversification funds instead of sustaining high fossil CAPEX. Reallocate the majority of CAPEX toward strategic low-carbon industries. 2. Improve transparency with consolidated reporting and climate-aligned CAPEX disclosure (avoiding financial loopholes and "greenwashing" through subsidiaries). 3. Redirect investments in grey hydrogen to green hydrogen (electrolysis powered by renewables). 4. Avoid concentrating investments in the petrochemical industry as the primary diversification strategy and assess other potential sectors with opportunity for market share capture. 5. Align executive remuneration with transition indicators (value preservation, successful diversification) rather than volume-based growth. 6. Internalize decommissioning and environmental clean-up costs into benefit/cost analysis for all remaining investments. 7. Prepare large-scale workforce transition and territorial reconversion strategies. Establish goals for workforce retraining, including cooperative/union ownership models in new clean business lines. |
Most urgent and critical actions
Strategic actions |
1. Define and implement a plan and roadmap to decrease dependency on oil revenues. Assessment should consider the presence of already established players in the sector of interest and potential. 2. Set clear, durable national-level policy goals to guide NOC transition, protected from political cycles. 3. Promote local and sector-specific R&D centers in new green productive activities and materials. 4. Support the creation of alternative revenue streams (e.g. renewables, electrical grid and storage, IT, biofuels, advanced manufacturing, and transition minerals mining) to replace oil rents. 5. Establish energy transition mandates for the NOC, and diversify board members with climate and energy transition experts. 6. Develop frameworks for responsible exit, decommissioning, and clean-up of mature assets, ensuring long-term liabilities are covered. |
Roadmap for Type E: Potential frontrunners.
Potential frontrunners are arguably the best relatively positioned among all types. Most have established climate goals for emissions (scopes 1 and 2), and some aim for carbon neutrality by 2050. While fiscal dependence and risk exposure may be high for some NOCs, their recognition of risks and need for action, along with relatively good technical capacity and openness, place them in a yellow zone. Their most likely pathway if no actions are taken is towards transition illusion: relatively efficient, with low-to-medium vulnerability and partial climate commitments, investing in low TRL strategies, technologies with limited prospects for scalability like CCUS and blue hydrogen. Without stronger mandates, they risk remaining dependent on fossil fuels.
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Actions to be carried out by NOCs |
Actions to be carried out by Governments |
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1. Identify potential new business lines according to each country's context and capacities. 2. Cease all new investments in exploration and development of new oil and gas fields in line with energy transition plans. 3. Avoid investing in technologies with limited prospects for scalability like standalone CCUS or petrochemical expansion as the primary diversification strategy. 4. Redeploy the majority of CAPEX toward strategic low-carbon industries. Prioritize business models focused on electrification, demand decarbonization, and low-carbon fuels. 5. Prioritize investments based on genuine comparative advantages (e.g. leveraging offshore expertise for offshore wind; subsurface expertise for geothermal). 6. Align executive remuneration with transition indicators (e.g. value preservation, emissions reduction, and successful diversification) rather than volume-based growth. 7. Establish goals for workforce retraining and just transition (including cooperative/union ownership models in new business lines) in consultation with affected workers. 8. Develop a strategy for financing decommissioning and remediation of mature fields. |
Most urgent and critical actions
Strategic actions |
1. Remove legal or regulatory barriers that constrain NOC diversification into new sectors or for vertical integration. 2. Establish energy transition mandates for the NOC, and diversify board members with climate and energy transition experts. 3. Estimate the national production gap aligned with the 1.5°C scenario, and the total cost of phaseout (fiscal, social, and environmental costs). 4. Assume a political decision of no new licensing for new exploration areas. 5. Protect NOC transition goals from short-term political shifts by anchoring them in national legislation and long-term performance contracts. 6. Anchor NOC transition in a national policy framework that aligns explicitly with national development and climate strategies. 7. Design strong and inclusive green industrial policies to support diversification of the entire value chain (e.g. R&D centers, new productive activities). |
An early, managed phase out of oil and gas production is the only viable path to safeguard national economies and communities from market shocks.
Turning risk into opportunity
The report sets out specific actions for NOCs, their host governments and the international community. Across all five types, the core recommendations are:
For NOCs:
- Prioritise capital reallocation: shift investment away from fossil fuel expansion and toward new economic and energy activities. Design roadmaps for the orderly phaseout of high-cost projects and redirect capital toward sustainable alternatives — either through the company itself, or by returning capital to the government to allocate.
- Publish credible 1.5°C-aligned transition roadmaps covering Scopes 1–3, including orderly phaseout of high-carbon assets. Conduct and disclose regular transition risk assessments under multiple price and demand scenarios.
- Integrate environmental and social costs into all investment decisions, including benefit/cost analysis of gradual decommissioning versus continued or expanded operations.
- Design and implement just transition strategies with workers, unions and communities, including retraining, income protection and co-benefit schemes.
For governments:
- Embed NOC transitions into national climate, energy and fiscal plans. In some cases, changing the legal mandate of the NOC will be necessary. Policy must shift from defending fossil rents toward building long-term resilience through fiscal reform and contingency planning.
- Mandate credible phaseout roadmaps in all relevant national plans — including NDCs, National Energy Plans and Long-Term Low Emission Development Strategies — with clear targets for production decline and just transition for workers and communities.
- Accelerate the decarbonisation of domestic energy demand in power, transport, buildings and industry, reducing structural dependence on oil and gas through pricing reform and deployment of renewables and electrification at scale.
- Redirect fossil fuel subsidies toward resilient energy infrastructure, and establish sovereign transition funds financed by remaining fossil revenues to support economic diversification.
Photo by COP30
Photo by COP30
For the international community:
- Mobilise dedicated international financial support for decommissioning, technology transfer, just transitions for workers and closing fiscal and diversification gaps — particularly for NOCs identified as having the highest exposure to transition risk.
- Strengthen international influence through trade conditions, financial regulations and strategic litigation to steer NOCs toward credible transition plans. Condition lending on the existence of robust transition roadmaps.
- Use the findings of this report to develop international and national roadmaps for a just and equitable energy transition, building on the COP28 commitment and the COP30 process for national fossil fuel phase-out pathways.
Lead Author: Carlos Adrian Correa-Flórez
Co-authors: Jessica Arias-Gaviria; Laura Flechas Mejía; Paola Andrea Zambrano-García; Sofía Delgado-Ramos; Carlos Arturo Saldarriaga-Cortés
This independent report was commissioned by the Global Gas and Oil Network.
This report is an abridged version of the full research paper, which is available in English, Spanish, and Portuguese.
The research, analysis, and opinions contained herein are the sole responsibility of the authors and not necessarily the views of the commissioning organisation.
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