Last year’s release of the International Energy Agency’s Net Zero by 2050 roadmap has become a textbook example of ill timing. Only four months later, the agency stated that due to declining OPEC spare production capacity, the world requires additional investment in oil exploration. Aside from these conflicting signals, the agency also chastised OPEC+ last year, accusing it of unfairly restricting global oil supplies in order to keep prices high.
At first sight, the world’s most powerful energy body, according to the FT’s Tom Wilson, appears to have no idea what it’s talking about. Big Oil, on the other hand, is unconcerned. Drilling is underway by Big Oil. It’s just that no one wants to talk about it. According to the consultant, 798 appraisal and exploratory wells were drilled last year, roughly equal to the number drilled the year before. It was also significantly less than the 1,256 wells drilled in 2019, although Latham believes the decrease was due to the epidemic.
This means that, with or without the IEA’s net-zero plan, new drilling might pick up this year, especially given the strength of oil demand, which, according to the IEA, has outperformed market forecasts. According to rumours, Shell discovered a potentially large resource in Namibia earlier this month. The discovery was not made by the corporation. According to Reuters, the government of the southern African country will make an official announcement this week, citing anonymous officials in the know.
Exxon continues to make discovery after discovery off the coast of Guyana. The most recent report was earlier this month, and it concerned preparations to begin producing from a second platform in the Stabroek Block, which would triple the country’s oil output. In the meantime, the supermajor has stated that it intends to become a net-zero firm by 2050.