Big Oil Clashes Over Fossil Fuel Future

By Charles Kennedy for Oilprice.com

Executives from major oil companies clashed over the prospects of oil and gas for the future at the first virtual edition of the CERAWeek conference in Houston.

While BP’s Bernard Looney and Shell’s Ben van Beurden boasted about their shift away from their core business and into renewable energy, Baker Hughes, Hess Corp., and Spain’s Repsol were among those believing that fossil fuels have yet to leave the scene for good, the Houston Chronicle’s Paul Takahashi reports.

“We’ve been an oil and gas company for 112 years, and I think this is a moment where we do have to reinvent the company,” BP’s Looney said. “We decided to really embrace that energy transition, more as a massive opportunity and not look at it as some sort of threat to our core business.”

“Hydrocarbons are still going to be essential for providing energy to the world, especially in the near term,” Baker Hughes’ Lorenzo Simonelli said, echoing an earlier statement that “There is no scenario where hydrocarbons disappear,” as expressed in his opening speech at the Baker Hughes annual meeting held last month.

As per the Houston Chronicle’s report, Hess Corp. and Carlyle International Partners shared their belief that demand for oil and gas will, in fact, rise over the next ten years despite the international push towards cleaner energy sources.

“We’re in a V-shaped recovery for demand,” Hess chief executive John Hess said, as quoted by Chron. “Once inventories are drawn down and we get rid of the glut, the challenge will be investment, and we’re going to need stronger prices to encourage that investment.”

Indeed, oil price movements seem to support the pro-fossil fuel view. Despite President Joe Biden’s—and the European Union’s—green agenda, the news of mass vaccinations and stimulus programs for the world’s largest economies have served to boost oil prices, suggesting that market players expected a demand rebound.

On the other hand, if governments dedicated to reducing their use of fossil fuels continue with the same enthusiasm, the long-term prospects of oil, at least, are likely to darken before too long.