Oil and gas companies are reinvesting record profits from the fossil fuel price surge driven by the Ukraine war to intensify the hunt for new deposits despite repeated calls by the United Nations to phase out hydrocarbons to avoid a climate crisis.
Data and industry executives found the exploration revival responds to pressure from a majority of investors to maximise their oil and gas profits rather than invest in lower margin renewable energy businesses.
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The International Energy Agency forecast global upstream oil and gas investments to increase by about 11 percent to $528bn in 2023, the highest level since 2015.
Barclays said it expected the number of offshore projects to get approval this year to reach a 10-year high.
The renewed appetite for oil and gas reserves and production – among European majors in particular – comes after Shell and BP slowed down plans to shift away from their legacy business and invest in renewables as part of the energy transition.
Upstream oil and gas have historically had returns of 15 to 20 percent while most renewables projects have delivered up to 8 percent.
An analysis of data from oil services firm Baker Hughes showed the number of offshore drilling vessels used to explore and produce oil and gas recovered in May to pre-pandemic levels, rising by 45 percent from October 2020 lows.
Wood Mackenzie analysts predicted a continued increase in activity, forecasting offshore exploration and drilling activity to grow by 20 percent by 2025.
The UK-based research and consultancy group also predicted the commitment of up to $185bn to develop 27 billion barrels of oil reserves with international oil companies focused on the higher-cost, higher-return deep-water developments.
Nambia, which has yet to produce any oil and gas, attracted strong interest after Shell and TotalEnergies made discoveries off the coast of the Southern African country.
Meanwhile in China, one of the biggest investors in wind and solar, calls for more coal-fired power plants multiplied after economic growth plunged and shortages caused blackouts and factory shutdowns.
While Beijing is forging ahead with plans to expand its use of renewable resources, the country has also been constructing an ever-growing number of coal-fired plants in the past few years.
Temperatures have hit new records around the world as the target of keeping long-term global warming within 1.5C (2.7F) moves out of reach.
United Nations chief Antonio Guterres has repeatedly warned world leaders that humanity faces a stark choice between working together or “collective suicide” in the battle against global warming.
As envoys gathered in Bonn in early June to prepare for this year’s annual climate talks in November, average global surface air temperatures were more than 1.5C above pre-industrial levels for several days, the European Union-funded Copernicus Climate Change Service said.
Parts of North America were about 10C above the seasonal average this month, and smoke from forest fires blanketed Canada and the United States.