Chevron Forecast Bright Future for Oil And Gas Sector
Chevron, United States oil and gas giant operating in almost all oil and gas rich regions of the world has said that oil and gas will comprise 48 percent of the world’s energy mix by 2040, even under the International Energy Agency’s most unfavorable scenario for the industry now put at 54 percent.
Mark Nelson, Chevron’s vice president for midstream, strategy and policy had said that “Multiple scenarios” each throw up the same result, showing that demand for oil and gas will remain strong for decades.
In a report released by the corporation, recently, it stated that findings, “gives us confidence that we’re testing our business in a way that’s appropriate for our shareholders, given the context of many things that can change over time,” Nelson said.
The San Ramon, California-based company said it continually assesses the risks that environmental and carbon-pricing policies pose to its business model and has concluded there’s little threat at the present time.
World energy demand will grow strongly under all scenarios, Chevron said. The company sees the risk of it having so-called stranded assets, or uneconomic resources, as “very slim” due to the quality and diversity of its assets, Nelson said.
The report is published just a month after Mike Wirth succeeded John Watson as chief executive officer. It follows a study published a year ago that Amy Myers Jaffe, an academic at the Council of Foreign Relations, said lacked the detail provided by some other companies.
Following fears of impacts of climate change on business, It was gathered that, investors Hermes EOS and Wespath Investment Management withdrew a proposal at Chevron’s annual meeting this year requesting an annual assessment of climate change impacts to give the company more time to come up with a fresh disclosure policy.
Chevron’s youngest director questioned the future of an industry the world’s third-largest oil explorer helps lead in a tweet earlier this week.
Dambisa Moyo, an economist and author who joined Chevron’s board in October 2016, on Wednesday tweeted, “If oil energy consumption is declining and #renewableenergy consumption is on the #rise, what does that mean for the future of the oil industry?”
Nelson said the fact that a board-member was asking such a question shows Chevron’s commitment to challenging its own modeling. “Those types of scenarios need to be tested as we look at our investments going forward,” he said.
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