BP and Shell are making changes to their energy outlook and operations in response to a rapidly shifting global energy landscape. BP’s 2023 Energy Outlook report projects that the Russia-Ukraine conflict will accelerate the transition to renewables and energy security, resulting in a 5% reduction in oil demand and 6% drop in natural gas demand in 2035. The energy giant also raised its 2035 demand outlook for renewables by 5% and for nuclear by 2%, with the greatest impact expected in Asia and the EU.
Separately, Shell announced a major restructuring of its business units, merging its oil and gas production and liquefied natural gas business into one entity and combining its renewables unit with its oil refining and marketing operations. The company has also reduced its executive committee to seven members.
It is expected to be a good year for oil and gas producers, but is unlikely to match 2022’s record results, as prices decline from current highs.