Oil majors promise to maintain clean energy push despite pandemic

The heads of the world's largest oil and gas producers pledged Tuesday to maintain a strategic focus on producing cleaner energy and helping to mitigate climate change despite reeling from the impact of the coronavirus pandemic on oil and gas prices.

Noting "concerns" that the coronavirus crisis could push oil and gas companies and governments to delay climate action, the industry-led Oil and Gas Climate Initiative said it is dedicated to maintaining this mission to help "combating the climate challenge".

"Rather than shifting our priorities, the COVID-19 crisis is further crystallizing our focus on what is essential: health, safety and protection of the environment while providing the energy and vital products that society needs to support economic recovery," OGCI CEO's said in an open letter published Tuesday.

Chaired by former BP boss Bob Dudley, the OGCI was formed in September 2014 to help fund clean-energy ventures and coordinate industry efforts to support the Paris Agreement climate goals.

The OGCI member companies -- BP, China's CNPC, Italy's Eni, Spain's Repsol, Saudi Aramco, Shell, Brazil's Petrobras, Exxon, Chevron, Occidental, Norway's Statoil and France's Total -- operate about 30% of global oil and gas production in 130 countries.

PEAK DEMAND

The International Energy Agency in March expressed concern that sliding fossil fuel prices could discourage spending on energy efficiency measures needed to curb greenhouse gas emissions. At the same time, the massive financial shock of the pandemic could jeopardize policies to support renewable energy and future low-carbon energy systems, market watchers say.

The OGCI said it plans to continue supporting governments as they design efficient policies that can accelerate energy transitions. It also reiterated its commitment to accelerate emissions reductions, such as through continued reductions in methane emissions.

"We will continue to work with others to support economic recovery and to transition to a healthier, lower-carbon future," the CEOs said in the letter.

Speaking to the Financial Times earlier this month, BP's CEO Bernard Looney said global oil demand may have already peaked ahead of the pandemic lockdowns which may leave lasting changes in energy consumption far into the future.

On Monday, however, the head of the IEA Fatih Birol told Bloomberg News he expected global oil consumption to return to pre-crisis levels or above sooner or later given a sustained economic recovery and low oil prices.

Before the crisis, world oil demand growth, which last year stood at around 100,000 b/d, was widely expected to flatline in the next decade as advances in renewable energy and electric vehicles continued to sap the world's need for fossil fuels.