The Oil and Gas Industry in Net Zero Transitions (IEA)

Summary

• If governments deliver on national pledges, oil and gas demand would be 45% below today's level by 2050, and it would fall by 75% to 2050 on a 1.5 degree trajectory.p.13
• The industry provides more than half of global energy supply and employs nearly 12 million workers, with annual revenues averaging close to USD 3.5 trillion since 2018.p.13
• The majors hold less than 13% of global oil and gas production and reserves, while national oil companies account for more than half of production and close to 60% of reserves.p.13
• Aligning with a 1.5 degree scenario requires emissions to be cut by more than 60% by 2030, and methane accounts for half of total emissions from oil and gas operations.p.14
• Return on capital employed in the oil and gas industry averaged around 6-9% between 2010 and 2022, against 6% for clean energy projects.p.14
• A reasonable ambition for diversifying producers is for 50% of capital expenditures to go towards clean energy projects by 2030.p.16
• Around 97 mb/d of oil and 4 150 bcm of natural gas were consumed in 2022, resulting in just over 18 Gt CO2 emissions.p.19

Key insights

1. Even in a 1.5 degree scenario, some 24 million barrels per day of oil and 920 billion cubic metres of natural gas are produced in 2050.p.15
2. Emerging and developing economies in Asia see their share of global crude oil imports rise from 40% today to 60% in 2050 in a scenario meeting national goals.p.17
3. The top fifty companies produce around 70% of total oil and gas supply.p.21
4. More than USD 200 billion worth of oil and gas deals took place annually on average between 2018 and 2022.p.23
5. Industry revenue ranged from a low of USD 2 trillion in 2020 to a record high of USD 5 trillion in 2022.p.24
6. Clean energy capital spending represents less than 3% of the industry's total capital budget and around 1% of total clean energy investment globally.p.25
7. Global oil demand stood at 96.5 mb/d in 2022, and in the STEPS reaches a maximum of 102 mb/d in the late 2020s.p.26
8. In the NZE Scenario, 1.5 billion of the 1.6 billion cars on the road are electric by 2050.p.27
9. Global natural gas demand in 2022 was around 4 150 bcm, 40% of which was consumed in the power sector.p.30