Oil Majors Concern | Is Natural Gas Still A Safe Bet?

oil majors

Increased scrutiny over the environmental impact of natural gas—a key source of methane, which is a much more harmful greenhouse gas than carbon dioxide—has some industry analysts questioning the long-term prospects of global gas demand in the energy transition.

Big Oil has bet big on natural gas developments in the past decade, expecting incessant growth in demand for decades to come. Today, the majors continue to expect solid demand for natural gas, justifying investments in more production.

But investors and buyers of natural gas have started to fret over the emissions impact of the fuel.

This could create risks for the biggest oil and gas corporations, including Shell, Total, and ExxonMobil, according to Sarah McFarlane of The Wall Street Journal.

Those three supermajors and many other oil and gas companies have bet big on growing their natural gas divisions to meet what they see as continued growth in global gas demand.

The net-zero and energy transition narrative, however, has changed the overall narrative in the gas industry—buyers want net-zero cargoes, while producers and sellers pledge carbon capture and reduction of methane emissions.

Natural gas demand will continue to grow in the coming years, after fully recouping this year the losses from the 2020 pandemic shock, the International Energy Agency (IEA) said earlier this year.

Asia is set to continue leading that growth, while many Western markets, including the European Union (EU), will start to pay more attention to the environmental credentials of natural gas.

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Source: Oil Price

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