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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Big Oil May Need To Shed $111 Billion In Assets In Clean Energy Push

The companies in the study – ExxonMobil, Chevron, ConocoPhillips, BP, Shell, Total, Eni, and Equinor – may have to divest combined resources of up to 68 billion barrels of oil equivalent in various geographies, with an estimated value of US$111 billion and spending commitments in 2021 totaling US$20 billion, according to the study.  

The Europe-based group of those companies, dubbed ‘Majors+’ by Rystad Energy, have pledged various commitments to become net-zero energy companies and significantly expand their renewable energy, hydrogen, or power market portfolios.

BP, for example, said in its new strategy last month that it would reduce its oil and gas production by 40 percent by 2030 through active portfolio management and would not enter exploration in new countries. Equinor mandated its incoming chief executive Anders Opedal – who will replace retiring Eldar Sætre in November – to accelerate Equinor’s transition from an oil company to a broad energy company. Eni announced in June a “new business structure to be a leader in the energy transition,” creating an Energy Evolution division in the company to accelerate its plans to significantly boost renewable power generation and biofuels production. Total is betting on EV batteries and solar power. 

Commenting on the Majors' strategies in oil and gas in view of the energy transition, Rystad Energy’s Senior Vice President Tore Guldbrandsoy said:

“Companies will look to expand in the prioritized countries through exploration, acquisitions or asset swaps with other Major+ players. However, to stay in a country that our criteria exclude, a company may instead seek to grow its local business more aggressively to make sure the portfolio will have a positive and more significant impact on overall performance.”

The companies are expected to keep a presence in the US, and most of them may also remain in Australia and Canada.

The majors could also strike deals among themselves in some regions. BP, Eni, and ConocoPhillips, for example, could consider buying the Indonesian portfolios of ExxonMobil, Total, and Shell, according to Rystad Energy.  

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 23 2020 said:
    Oil supermajors aren’t that stupid to shed $111 bn in oil assets just to burnish their environmental credentials. They will never commit an act of sheer folly of undermining the core business that sustains them. One has to judge them by what they do and not by what they say. In a nutshell, they aren’t going to cut their noses to spite their faces.

    Environmental activists and divestment campaigners have to accept that an imminent global energy transition from oil and gas to renewables and also zero emission are illusions. They better understand that transition is already happening in a gradual way. Furthermore, we are already witnessing the demise of the biggest polluter: coal. With time global electricity will be totally generated by renewable and nuclear energy. Global transport and petrochemicals are a different story altogether.

    Furthermore, there will be neither a global economy nor civilization as we know and enjoy without oil and gas and vice versa. Anything different is a myth.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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