Stranded Assets and Transition Risks: Financial Implications for the EU's Oil and Gas Sector in the Low-Carbon Era

Abstract

The European Union's commitment to reducing carbon emissions and transitioning to a low-carbon economy poses significant challenges for the energy sector. Transition risks, alongside the risk of stranded assets, are critical concerns for oil and gas companies. This thesis aims to assess the vulnerability of these companies to the ongoing energy transition and explore its potential financial and operational implications. The study combines quantitative financial analysis with qualitative assessments to provide a comprehensive understanding. Stricter regulatory measures and shifting market demands are increasing the exposure of EU companies to these risks, highlighting the need for diversification and investment in renewable energy to safeguard financial stability in a rapidly evolving regulatory and market environment.