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Oil majors promise to maintain clean energy push despite pandemic

May 28/2020

MOSCOW (MRC) -- 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, reported S&P Global.

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.

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.

As MRC informed previously, global oil consumption cut by up to a third. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
Author:Margaret Volkova
Tags:Europe, South America, PP, PE, LLDPE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, CNPC, BASF, Borealis, BP Plc, Chevron, Eni, Exxon Mobil, LyondellBasell, Petrobras, Repsol, Sabic, Saudi Aramco, Shell, Statoil, Tota.
Category:General News
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