ExxonMobil and Shell’s $6.7bn Bosi project in Nigeria. Kuwait Petroleum Corp’s $7.5bn Lower Fars Heavy Oil (Phase 2) project in Kuwait. High-risk projects which rely on a breakeven oil price of over $50 and would only start producing late this decade include: It shows how companies can manage the peak in demand, while reducing the risk of wasting investment, and preparing to wind down production in line with the Paris Agreement target. The report explores a non-linear demand pathway using the Inevitable Policy Response consortium’s Forecast Policy Scenario (FPS), commissioned by the UN PRI, which is consistent with limiting global temperature rise to 1.8☌. Shareholders could face catastrophic levels of value destruction as prices fall.” However, this could become a nightmare scenario if they go ahead with projects which deliver oil around the time that demand stars to decline. Hundreds of billions of dollars of investments could be wasted if new projects fail to deliver commercial returns.Īxel Dalman, Oil & Gas analyst and lead author of the report said: “Companies may see high prices as a huge neon sign pointing towards investment in more supply. However, if companies invest in high-cost projects in the expectation of continued high prices the market could be severely oversupplied as demand falls, driving prices down. It finds that the best route to meet that demand while preserving value is to maintain a conservative approach to long-term investment and meet short-term demand with shale projects that can deliver new production quickly. Managing Peak Oil: Why rising oil prices could create a stranded asset trap as energy transition accelerates considers the financial implications of a future where demand increases into the mid-2020s and then falls rapidly. The report warns companies to anticipate this shift and manage the decline. 
Oil prices have rebounded strongly as the global economy bounces back from the Covid pandemic, but this trend is unlikely to last because government climate commitments combined with the rapid switch to electric vehicles will drive down long-term demand for oil.
LONDON/NEW YORK, January 27– Surging oil prices may tempt oil and gas companies to make long-term investment decisions that cost shareholders dearly, but a cautious “managed” approach to the energy transition would do most to preserve shareholder value and help society achieve climate goals, Carbon Tracker finds in a report released today. Firms can avoid wasting $500bn with managed approach to transition in IPR scenario even if demand rises short-term.
0 kommentar(er)
