Oil Firms Risk Trillions if Climate Targets Reached

Oil Firms Risk Trillions if Climate Targets ReachedOil Firms Risk Trillions if Climate Targets Reached

Energy giants including Exxon Mobil and Royal Dutch Shell risk wasting more than a third of their budgets on projects that will not be needed if climate targets are to be met, a think-tank report shows.

More than $2 trillion of planned investment in oil and gas projects by 2025 could be redundant if governments stick to targets to lower carbon emissions to limit global warming to 2 degrees Celsius, according to a report by the Carbon Tracker think-tank and institutional investors, CNBC reported.

It compared the carbon intensity of oil and gas projects planned by 69 companies with requirements needed to meet the warming target set by the 2015 Paris agreement, which will require curbing fossil fuel consumption.

It found Exxon, the world's top publicly-traded oil and gas company, risks wasting up to half its budget on new fields that will not be needed. Shell and France's Total would see up to 40% of their budgets misspent. Fossil fuel producers have come under growing pressure from investors to reduce carbon emissions and increase transparency over future investment.

Top energy companies have voiced support for the Paris agreement reached by nearly 200 countries in 2015. Many of them have urged governments to impose a tax on carbon emissions to support cleaner sources of energy such as gas.

US President Donald Trump said this month he would withdraw the United States from the Paris accord which he said would undermine the US economy.

The report found five of the most expensive projects, including the extension of Kazakhstan's giant Kashagan field and Bonga Southwest and Bonga North in Nigeria, will not be needed if the global warming target is to be met.

Saudi Arabia's state-run Aramco, widely considered the lowest cost oil producer, would see up to 10% of its production rendered uneconomical, the report said.

The report's authors said their discussions with oil companies had shown the companies wanted to remain flexible to respond to future developments and possible changes in the oil price.

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