The CEO of Chevron said a big threat to its core fossil business is “fairly hard to find”, as he gave no sign the US oil supermajor is set to ramp-up its energy transition ambitions to match those of European peers such as Total and BP.
Michael Wirth claimed soaring global energy needs will mean that the “percentage supplied by our industry is likely to remain somewhat similar to what it’s been historically”, despite the growth of renewables and other clean alternatives, and with underlying demand fundamentals largely unchanged despite the market shocks of the Covid pandemic.
“A big threat to oil is still fairly hard to find,” Wirth told the Reuters Next digital forum.
While a steep growth in electric cars will hit demand for light-duty transportation fuels, the Chevron boss said “much harder” sectors for the energy transition such as heavy transport, shipping, aviation and industrial applications would remain big markets for oil & gas.
In the longer term, Wirth said hydrogen and nuclear both have the potential to play significant roles in the global energy mix.
But he offered no sign that Chevron is poised to join the likes of Shell, Total and BP, which have over the last two years announced major moves into solar and offshore wind development, green hydrogen and battery storage, and set big renewable energy targets alongside corporate decarbonisation goals.
Like fellow US supermajors ExxonMobil and ConocoPhilips, Chevron has been cited as an energy transition laggard by comparison. Wirth insisted Chevron “supports the Paris Agreement” and would be able to work with the incoming Biden administration in the US, which is set to pursue a far greener agenda than the departing Trump government.
“We have to get to know people. I expect us to engage constructively and find common ground,” Wirth said.
Chevron’s own low-carbon strategy will remain focused on reducing emissions from its own business, including by linking renewables to its operations, and investing in promising technologies in fields such as carbon capture and storage, said the CEO.
Challenged on whether investors would continue to support Chevron given the growing clamour for capital to shun polluting businesses, Wirth claimed “many of the same institutions that we see today” would still be backing it in five years.
“They are looking for returns for their shareholders,” he said, claiming his company and others in the sector still have plenty of mileage to drive up returns for investors as well as pursuing a decarbonisation agenda.