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* National oil firms seen expanding market share
* Oil demand still growing strongly in Asia
* Large fund manager warns of higher oil prices
(Updates with Saudi energy minister)
By Dmitry Zhdannikov
LONDON, June 1 (Reuters) - Climate activists who scored big
wins against Western majors last week had some unlikely
cheerleaders in the oil capitals of Saudi Arabia, Abu Dhabi and
Russia.
Defeats in the courtroom and boardroom mean Royal Dutch
Shell, ExxonMobil and Chevron are all
under pressure to cut carbon emissions faster. That’s good news
for the likes of Saudi Arabia’s national oil company Saudi
Aramco, Abu Dhabi National Oil Co, and Russia's
Gazprom and Rosneft.
It means more business for them and the Saudi-led
Organization of the Petroleum Exporting Countries (OPEC).
"Oil and gas demand is far from peaking and supplies will be
needed, but international oil companies will not be allowed to
invest in this environment, meaning national oil companies have
to step in," said Amrita Sen from consultancy Energy Aspects.
Climate activists scored a major victory with a Dutch court
ruling requiring Shell to drastically cut emissions, which in
effect means cutting oil and gas output. The company will
appeal.
The same day, the top two U.S. oil companies, Exxon Mobil
and Chevron, both lost battles with shareholders who accused
them of dragging their feet on climate change.
The International Energy Agency, which looks after the
energy policies of the West, issued an appeal last month to the
world to essentially scrap all new oil and gas developments. But
it gave no clear formula on how to reduce demand.
"It (the IEA report) is a sequel of the La La Land movie.
Why should I take it seriously?" Saudi Energy Minister Prince
Abdulaziz bin Salman said on Tuesday.
"We (Saudi Arabia) are ... producing oil and gas at low cost
and producing renewables. I urge the world to accept this as a
reality: that we’re going to be winners of all of these
activities," he told an online news conference after a regular
OPEC+ meeting.
HOSTILE REGIMES
A high-level executive from Russia's Gazprom said: "It looks
like the West will have to rely more on what it calls 'hostile
regimes' for its supply".
Saudi Aramco, Adnoc and Gazprom all declined to comment. Oil
major Rosneft, in which the Russian state has the biggest stake,
also declined to comment.
Western oil majors like Shell have dramatically expanded in
the last 50 years, as the West sought to cut its reliance on
energy from the volatile Middle East and from Russia.
Those same Western energy majors, including BP and
Total, have set out plans to sharply reduce emissions
by 2050. But they face growing pressure from investors to do
more to meet U.N.-backed targets to limit global warming.
Saudi Aramco, listed on the Saudi bourse but majority state
owned, is not under the same sort of pressure to cut its carbon
emissions, although the kingdom's rulers aim to sharply increase
the country's use of renewables.
Gazprom expects demand for natural gas to grow in coming
decades and for it to play a bigger role in energy consumption
than renewable sources and hydrogen.
Western oil majors control around 15% of global output,
while OPEC and Russia have a share of around 40 percent. That
share has been relatively stable in recent decades as rising
demand was met with new producers like smaller private U.S.
shale firms, which face similar climate-related pressures.
PEAK DIVIDENDS
Since 1990, global oil consumption has grown to 100 million
barrels per day from 65 million bpd, with Asia providing the
lion's share of growth.
Countries such as China and India have made no pledges to
reduce oil consumption, which on a per-capita basis is still a
fraction of the levels in the West. China will rely heavily on
gas to cut its huge coal consumption.
Despite pressure from activists, investors and banks to cut
emissions, Western oil majors are also tasked with maintaining
high dividends amid heavy debts. Dividends from oil companies
represent significant contributions to pension funds.
"It is vital that the global oil industry aligns its
production to the Paris goals," said Nick Stansbury at Legal &
General, which manage £1.3 trillion ($1.8 trillion) in assets on
behalf of savers, retirees and institutions. "But that must be
done in step with policy, changes to the demand side, and the
rebuilding of the world’s energy system.
"Forcing one company to do so in the courts may (if it is
effective at all) only result in higher prices and foregone
profits," Stansbury said. Legal & General, one of the world's
largest fund managers, holds assets in most oil majors.
Climate lawsuits have been filed in 52 countries in the past
two decades, with 90% of those in the United States and European
Union, risk consultancy Verisk Maplecroft said.
"The same oil and gas will still be produced. Just with
lower ESG standards," said an executive from a Middle Eastern
producer, who previously worked for an oil major, referring to
environmental, social and governance performance measurements.
(Additional reporting by Alex Lawler, Ron Bousso and Noah
Browning in London
Writing by Dmitry Zhdannikov
Editing by William Maclean and David Holmes)
