Unlike European supermajors, U.S. Chevron doesn’t have any plans to reduce its oil and gas business to invest in solar or wind power, chief financial officer Pierre Breber said at a Reuters conference on Thursday.
Shareholders have ramped up pressure on the world’s largest public companies—including Chevron—to start preparing their business for profits in the energy transition. Most European oil and gas supermajors have pledged to become net-zero energy businesses by 2050 and to invest growing amounts of cash into renewable and low-carbon energy solutions.
At Chevron, 61 percent of shareholders backed a proposal at the annual general meeting last month that the company cut its so-called Scope 3 emissions, the ones generated by the use of its products, rebuffing the board, which had urged shareholders to reject it.
Chevron will be investing in technology to cut emissions from its operations, instead of investing in renewable energy sources such as wind or solar power, according to CFO Breber.
The U.S. firm plans to invest around $3 billion in emissions-cutting technology and actions through 2028, Breber said at the Reuters Events Global Energy Transition conference. Out of the planned investment, Chevron will invest $2 billion to cut emissions from its production and another $750 million to produce renewable fuels such as renewable natural gas, Breber noted.
At its annual investor meeting in March, Chevron said it would reduce carbon intensity by 35 percent by 2028 and achieve zero routine flaring by 2030. Chevron also plans to invest in low-carbon technologies such as hydrogen and carbon capture, utilization, and storage (CCUS).
Chevron’s approach differs from that of the major European oil firms, which expect to lower their oil production going forward while raising investment and production of renewable electricity. Shell, for example, affirmed earlier this year its oil production peaked in 2019. BP looks to slash oil and gas production by 40 percent by 2030, while Eni sees its oil production peaking in 2025.
By Charles Kennedy for Oilprice.com
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That is why they have adopted a very realistic and effective strategy to combat climate change by reducing emissions from fossil fuels rather than their use. To this end, Chevron and other US supermajors will be investing in technology to cut emissions from its operations.
Unlike European supermajors, American supermajors are brushing aside excessive, unreasonable and futile pressure from hardline activists and divestment campaigners to divest of their oil and gas assets or reduce their production.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London