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Fossil Fuel Industry Needs New Discoveries

The year 2020 marked a turning point in the Fossil Fuel Industry. Experts cautioned that approximately $900 billion in reserves—roughly one-third of the value of major oil and gas companies—were at risk of being useless in the face of a global pandemic, extreme market shocks, and a transition toward renewable energy.

Also Big Oil seemed to accept its fate, with Royal Dutch Shell (NYSE:RDS.A) CEO Ben van Beurden announcing that we had already reached peak oil production, and BP Plc. It is a business that increased its aggressive drilling immediately after the historic 2015 UN Climate Change Agreement—finally gave in and said, “concerns about carbon emissions and climate change mean that it is increasingly unlikely that the world’s reserves of oil will ever be exhausted.

Yet, in an ironic twist of fate, rather than vast oil and gas reserves remaining buried deep underground, the planet could run out of those resources within our lifetimes. Since produced volumes are not being completely replaced by new Discoveries, Norway-based energy consultancy Rystad Energy has cautioned that Big Oil’s proven reserves could run out in less than 15 years.

ExxonMobil (NYSE:XOM), BP Plc., Shell, Chevron (NYSE:CVX), Total (NYSE:TOT), and Eni S.p.A., according to Rystad, have proven oil and gas reserves that are declining as produced quantities are not being completely replaced by new Discoveries. Last year, massive impairment charges caused Big Oil’s proven reserves to drop by 13 billion boe, or 15% of its stock levels in the field. Unless Big Oil makes more commercial Discoveries rapidly, Rystad estimates that the remaining reserves will be depleted in less than 15 years.

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