Big oil welcomes COP28 call to move away from fossil fuels in ‘orderly’ way

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The world’s largest oil producers have saluted the COP28 agreement’s focus on an “orderly” move away from fossil fuels and a continued role for “transitional” energy sources such as gas.

The compromise reached on Wednesday included a reference to fossil fuels for the first time in three decades of UN climate agreements but failed to support phasing them out.

France’s TotalEnergies, whose chief Patrick Pouyanné attended as a guest of the UAE, said the agreement aligned with the company’s strategy and praised the role played by COP28 president Sultan al-Jaber, head of the Abu Dhabi National Oil Company, Adnoc.

In a statement, Total applauded his pragmatic presidency, which brought together western nations, the Global South, and oil and gas producing countries “to openly discuss the most challenging issues”.

The US oil industry, represented by the American Petroleum Institute, also backed the deal, noting that calls by ministers from more than 100 countries for the “complete phaseout of fossil fuels” had failed.

The agreement “calls on parties” to take actions including “transitioning away from fossil fuels in energy systems in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.”

The language was celebrated as historic by ministers from around the world, including the EU and Canada but investors in the largest publicly listed oil majors took the COP decision in their stride. Shares in BP, Shell, ExxonMobil and Chevron were all largely unchanged by late Wednesday afternoon in London.

The deal comes after one of the most controversial summits of the COP process, during which environmentalists questioned whether the UAE, one of the world’s biggest oil producers, was the right venue.

Adnoc plans to expand production capacity by more than 10 per cent to 5mn barrels a day by 2027.

Although Norway backed the phasing out of fossil fuels during the negotiations and state-backed Equinor praised the agreement, there is also little sign the Norwegian industry is changing course.

On Wednesday Offshore Norway, the industry body for the Norwegian energy sector, said investments in the country’s oil and gas sector are expected to rise by 9 per cent next year to almost $22bn.

The largest US producers ExxonMobil, whose boss Darren Woods was the first chief executive from the company to visit a UN climate summit, and Chevron did not immediately respond to requests for comment.

Mike Sommers, chief executive of the American Petroleum Institute, said by not agreeing to a “phaseout of fossil fuels” negotiators had realised that “too far/too fast mandates” were unproductive.

“Oil and natural gas are meeting more than half of total world energy demand. Alternative sources like wind and solar have a role and their deployment will be expanding,” he said on social media platform X.