ExxonMobil and Chevron Buck the Trend: Doubling Down on Fossil Fuels

US Oil Majors ExxonMobil and Chevron Continue Investment in Fossil Fuels Amid Global Push for Clean Energy

by Motoni Olodun

In a world striving to balance escalating energy demands with the urgent need to reduce greenhouse gas emissions, a surprising development has emerged. ExxonMobil and Chevron, two of the largest oil companies in the United States, are ramping up their investments in fossil fuels, bucking the global trend toward cleaner energy.

ExxonMobil has struck a $60 billion deal to acquire Pioneer Natural Resources, a leading shale producer in the Permian Basin. Meanwhile, Chevron has agreed to a $53 billion deal to buy Hess Corporation, which holds a 30% stake in Guyana’s offshore oil fields.

These acquisitions indicate that ExxonMobil and Chevron are banking on the continued profitability of oil and gas. This is despite fluctuating prices due to geopolitical tensions and supply disruptions. Interestingly, these companies have been slow to follow their European counterparts like BP and Shell in investing in low-carbon technologies and setting ambitious net-zero targets.

The International Energy Agency (IEA) corroborates this trend in its latest analysis. It projects that global investment in fossil fuel supply will increase by over 6% in 2023, reaching almost $950 billion. This level of investment is at odds with the goals of the Paris Agreement, which aims to limit global warming to well below 2°C above pre-industrial levels.

The IEA also notes that while spending on clean fuels such as bioenergy, hydrogen, and carbon capture is increasing, it remains well below what is needed for climate-driven scenarios. It calls for collaboration between governments and industry to ensure the safety and benefits of clean energy transitions.

Experts argue that oil majors are missing an opportunity to diversify their portfolios and prepare for a low-carbon future. They suggest that renewable energy investments can offer higher returns, lower risks, and greater social acceptance than fossil fuels. They also warn of potential stranded assets, regulatory pressures, and reputational damage if these companies fail to align with global climate goals.

However, some analysts recognize that the energy transition is complex and gradual. They argue that oil and gas will continue to play a significant role in meeting global energy needs for decades. This is particularly true in developing countries where access to electricity and clean cooking facilities is still lacking.

This news underscores the divergent strategies of oil majors in responding to global energy challenges. It also raises questions about achieving a just and inclusive transition that ensures energy security, affordability, and sustainability for all.

Source: Nairametrics

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