State-owned oil companies risk losing an estimated $400 billion (£289bn) in revenue, as the world shifts to cleaner energy sources.
That’s according to a new report by the independent nonprofit organisation Natural Resource Governance Institute (NRGI), which estimates one-fifth of anticipated investments in the oil and gas sector by state companies are economically unviable.
The analysis suggests national oil companies, which produce half of global oil and gas and are responsible for 40% of the money spent in the industry worldwide, could still invest nearly $1.9 trillion (£1.3tn) in the next ten years.
The report notes that the governments of countries including Algeria, Nigeria, Angola and Azerbaijan are making risky bets with public money.
David Manley, NRGI Senior Economic Analyst and Co-Author of the report said: “State oil companies’ expenditures are a highly uncertain gamble.
“They could pay off, or they could pave the way for economic crises across the emerging and developing world and necessitate future bailouts that cost the public dearly.”