Big Oil’s is clearing assets like a dog sheds its winter coat. In a rush to prove their emerging environmentally conscious credentials, the supermajors are pledging billions in low-carbon energy investments and committing to net-zero goals over the next decade. Many oil and gas companies are breaking up the shed assets.The Wall Street Journal reported that small energy independents are happy to rid Big Oil’s of its unwanted assets as they bet on the long-term future of oil and gas despite the seemingly ubiquitous ambition to eliminate oil and gas from the world’s energy mix.
Many analysts presumed that the world’s thirst for oil and gas to continue rising, mainly in Asia. Wood Mackenzie, found that demand for crude oil there could jump by as much as 25% by 2040. Asia is currently the Big Oil’s guzzler globally, 25% would be quite a sizable increase. The production on a global scale will probably be lower because of all the low-carbon commitments of Big Oil’s.
Other analysts noted that the capital spending cuts that virtually every oil company in the world implemented during the pandemic, which affected their exploration activity. This could have a significance about their long-term production outlooks. These implications would be negative, potentially tipping the market into a shortage. In all fairness, there were warnings along the same lines during the 2014-2015 oil price crash, and they never materialized.