Outlook 2022: The future of oil majors in the energy transition

The big oil and gas companies are faced with the prospect of losing a large part of their market as the world transitions away from fossil fuels. Can they carve out a positive role for themselves?

Oil supply will increase by 6pc by 2030 under stated government policies, but decline by 27pc in a scenario leading to net zero by 2050, according to the IEA. For gas, the figures are plus 10pc and minus 9pc. That is a wide range of uncertainty. And stated government policies would require an investment of nearly $700bn/yr in upstream oil from 2030—well above current levels—whereas on the net-zero-by-2050 trajectory there will be no need for investment in new fields. With reasonable optimism about global progress in converting to clean energy, a tipping point will eventually occur when prices will decline closer to the production costs of the lowest-cost fields, mainly in Opec countries. Tha