While European oil firms are going for ‘green’ full steam ahead, and their American counterparts are aiming for a milder ‘blue’, Japanese oil companies still aren’t certain about the ‘color’ of their energy transition.

The net-zero debate amongst most fossil fuel energy giants appears pretty much been settled, but the conversation in Japan’s oil and gas sector remains muted. Many in the industry believe that holding onto hydrocarbon resources is the best approach, regardless of trends elsewhere.

Nevertheless, Japanese companies need to accept and observe the country’s new carbon neutrality law, even if there’s a lack of clarity about the details. As it stands, many in Japan’s oil and gas sector, which is led by several state-backed companies, wonder in which direction they should pivot (if at all) amid the seemingly contradictory national security objectives.

This has led to mixed messages, in both strategies and actions, from Japanese upstream firms. They are also paying close attention to U.S. energy giants, waiting to see whether they’ll carve out a new course in the energy transition, or eventually succumb to their European peers’ renewables-first environmental agenda.

Regulatory framework shapes climate strategies
Strategies are often impacted by local regulatory frameworks. ….