Global oil discoveries fell to a record low last year and are showing no sign of recovery, raising the risk of shortages in coming years, the International Energy Agency has warned. The number of conventional oil projects being sanctioned for development also dropped to the lowest level in more than 70 years as low crude prices stifled investment, the IEA said. The Paris-based agency warned late last year that the world was on track for “the next boom and bust cycle”, with supply shortfalls likely to cause “rapid price increases” unless investment in new projects picked up again this year. It said yesterday that such a revival had yet to materialise and that “the level of new sanctioned projects so far in 2017 remains depressed”. Less than 5 billion barrels’ worth of conventional oil resources were sanctioned for development last year, down from almost 7 billion barrels in 2015 and 21 billion barrels in 2014, the year oil prices began their slide. Approvals of offshore projects, which are typically more expensive, fell disproportionately, representing 14 per cent of new project sanctions compared with more than 40 per cent on average over the previous 15 years.
Times 28th April 2017 read more »
Growing number of pension funds divest from fossil fuels. Waltham Forest, a borough in north-east London best known for hosting part of the 2012 Olympics, made history last year when its pension fund for local council workers decided to pull out of fossil fuels. In September 2016, the £735m retirement fund became the first local government pension scheme in the UK to commit to divesting from all fossil fuels. In the months since, the retirement scheme for Southwark, another borough in the British capital, said it would also pull out of fossil fuels, while Hackney’s pension fund announced plans to cut its exposure by 50 per cent. The London schemes join a small but growing number of pension funds across the world that have decided to fully or partially divest from companies that generate revenues from oil, gas and coal. Their withdrawal from these sectors comes as concerns mount that carbon-intensive businesses could incur significant financial losses as governments attempt to tackle climate change. But pulling out of fossil fuel companies remains controversial. While many academics and investment experts argue that schemes that delay divestment could suffer large losses, there are also widespread fears that investors who pull out of carbon-intensive industries prematurely could miss out on future returns.
FT 28th April 2017 read more »