Oil, gas reserves to witness drastic reduction over climate change
The future of oil and gas across the world is coming under intense pressure following reports by Shell, which plans to empty reserves by over 80 per cent in the next 12 years.
The report, hinged on the implications of climate change, came at a time when energy experts were insisting that unless countries drastically cut greenhouse gas emissions by moving away from fossil fuels, climate change would remain inevitable.
While oil majors are already cutting back on exploration activities in Nigeria, the decision by Shell indicated that keeping large part of oil and gas reserves in the ground would be risky.
The Shell Nigeria Exploration and Production Company (SNEPCo) is a key player in the Nigeria oil and gas industry. It pioneered Nigeria’s deep-water oil and gas production at the Bonga field, a project that increased Nigeria’s oil capacity by over 10 per cent when output began in 2005.At full output, Bonga has the potential to add more than 200,000 barrels of crude oil and 150 million standard cubic feet of gas to Nigeria’s daily production.
The report, called the Shell Energy Transition Report, revealed the company’s transition plan from fossil fuels to sustainable energy.
According to the report, about 80 per cent of all oil and gas reserves of the company will be produced before 2030.
Energy analysts at the Grantham Institute of Climate Change and the Environment at Imperial College London and Carbon Tracker think tank had earlier said oil would reach its peak by 2020 and cut supply to the market by two million barrels a day by 2025, the same volume that caused the oil price collapse in 2014 and 2015.
Shell said: “We come to the conclusion that there is a low risk that Shell will have ‘stranded assets’ or reserves that we will not be able to produce profitably in the medium term.”
Shell Chief Executive Officer, Ben van Beurden said in the report that the company would welcome and support the Paris climate agreement.
However, the oil major would produce oil and gas for decades, Beurden said.
He said: “We expect to continue investing in maintaining the oil and gas supply to meet the growing demand for energy in the world.”
Beurden revealed last year that the company’s investments for the new business unit New Energies would focus on sustainable energy and add about $ 2 billion per year until 2020.
While there is to drastically reduce the amount of CO₂ per unit of energy produced in 2050, Shell said it would halve CO₂ by 2050.
It also limits the financial consequences of an increasing price for CO₂.
The company plan to invest more into electricity and gain customers and root in power generation by solar, wind and gas.