Indeed, fossil fuels will stay now and even after the year 2060. Why else would the two American oil giants venture into acquiring two independent US companies for a total of $120 billion within ten days?! Is it not because of confidence in oil and gas for years to come?! Interestingly, the investment is in their own backyard with all kinds of detailed information on the two companies, namely Pioneer Natural Resources and Hess Corporation, the New York-based company that enjoyed a crude oil relationship with KPC in Kuwait. Undoubtedly, the future of oil is secure for years to come.

This is enticing further future speculations for the remaining companies like Shell and BP. This is the same with the UK companies, with talks about mergers in the markets for some years now. Standing alone is no longer an option. The same could apply to the two European companies - Total, and Agip Oil Company, along with the remaining independent US companies like ConocoPhillips, Marathon Oil, Valero, Range Resources, and ERO. The amounts for such acquisitions are huge but it has become a matter of existence. Remaining independent is no longer viable. If on the other hand, the oil companies don’t believe that oil will remain after 2050, it is perhaps time to exit and sell their ventures.

Consultations are the name of the game but in a big way. The takeover of Hess Corporation last week by Chevron for close to $56 billion, and the acquisition of Pioneer Natural Resources by ExxonMobil are evidence of the fact that fossil fuels are to stay. This time is different due to the huge investments in their lands and within their own landlords, and not outside their own homelands, secure and within their own established laws and regulations. The world was waiting for some assurances from the top oil companies, and who could do it better than the two giants putting their ‘cash” in the right place to serve as evidence? This is needed for oil explorations and monies to start rolling again and sharing with the oil-producing countries in investing in fossil fuels again.

The next step to monitor is the future mergers and buyouts of the second tier of oil companies in consulting oil industries in combined resources, and to benefit more and ensure efficient throughputs of oil and gas. Certainly, this is reassuring news, even though we wish the current US administration should have not discouraged oil companies in its early days in the first place by warning against fossil fuels. Now the same administration has reversed its position, after accomplishing its ignorant advice. For sure we cannot set a certain timetable for the duration or peaking of global oil demand. For sure it will extend beyond 2026, but again, it is just a guessing game. For oil-consuming countries, however, business is as usual. They are not minding watching and observing any developments, perhaps to follow suit. For sure, the acquisitions worth $120 billion made the headlines, affirming that fossil fuels will remain put.

By Kamel Al-Harami
Independent Oil Analyst
Email: [email protected]