Oil majors could waste trillions if climate targets reached; Exxon most exposed

|By:, SA News Editor

Oil companies risk wasting $2.3T of investments should demand peak in the next decade as the world changes its energy mix to limit global warming, according to a new report from Carbon Tracker.

Exxon Mobil (XOM -1%) is the most exposed oil major, the report says, with as much as 50% of potential spending to 2025 on projects that would not be needed if climate targets are met, and Royal Dutch Shell (RDS.A -1.4%), Chevron (CVX -1.7%), Total (TOT -1%) and Eni (E -0.2%) risk wasting as much as 40% and BP (BP -1.1%) up to 30%.

Under a business-as-usual outlook, the report says capital spending and production would generate 380B tons of carbon dioxide by 2035, and oil companies would have to avoid projects generating 60B tons of CO2 to be consistent with the International Energy Agency’s scenario that gives the world a 50% chance of limiting warming to 2 degrees Celsius.

Some of the companies have rejected the idea that assets could end up redundant, saying the reserves they hold are too small to be affected by any long-term decline in demand.

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