Climate activists who scored big against Western majors last week had some unlikely cheerleaders in the oil capitals of Saudi Arabia, Abu Dhabi and Russia.
Defeats in the courtroom and boardroom mean Royal Dutch Shell (RDSa.L), ExxonMobil (XOM.N) and Chevron (CVX.N) are all under pressure to cut carbon emissions faster. That’s good news for the likes of Saudi Arabia’s national oil company Saudi Aramco (2222.SE), Abu Dhabi National Oil Company and Russia’s Gazprom (GAZP.MM) and Rosneft (ROSN.MM).
It means more business for them and the Saudi-led Organization of the Petroleum Exporting Countries (OPEC).
“Oil and gas demand is far from peaking and supplies will be needed, but international oil companies will not be allowed to invest in this environment, meaning national oil companies have to step in,” said Amrita Sen from Energy Aspects consultancy.
Climate activists scored a major victory with a Dutch court ruling requiring Royal Dutch Shell to drastically cut emissions, which in effect means cutting oil and gas output. The company will appeal. read more
The same day, the top two U.S. oil companies, Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N), both lost battles with shareholders who accused them of dragging their feet on climate change. read more
“It looks like the West will have to rely more on what it calls “hostile regimes” for its supply,” joked a high-level executive from Russia’s Gazprom oil and gas group, referring to energy companies around the world owned completely or mostly by the state.
Saudi Aramco, Adnoc and Gazprom all declined to comment. Oil major Rosneft, in which the Russian state has the biggest stake, also declined to comment.
A senior Saudi Aramco staffer said the court ruling would make it easier for OPEC to ramp up production.
“It is great for Aramco,” the staffer said.
Western oil majors like Shell have dramatically expanded in the last 50 years, as the West sought to cut its reliance on energy from the volatile Middle East, and from Russia.
Those same Western energy majors, including BP and Total, have set out plans to sharply reduce emissions by 2050. But they face growing pressure from investors to do more to meet U.N.-backed targets to limit global warming.
Saudi Aramco, listed on the Saudi bourse but majority state owned, is not under the same sort of pressure to cut its carbon emissions, although the kingdom’s rulers aim to sharply increase the country’s use of renewables.
Gazprom expects demand for natural gas to grow in the coming decades and for it to play a bigger role in energy consumption than renewable sources and hydrogen. read more
Western oil majors control around 15% of global output, while OPEC and Russia have a share of around 40 percent. That share has been relatively stable in the last decades as rising demand was met with new producers like smaller private U.S. shale firms, which today…
Read More: OPEC, Russia seen gaining more power with Shell Dutch ruling