The Future of Oil - future is bright for low marginal cost producers
The FT notes that Trump's decision to withdraw the US from Paris climate agreement is having little practical impact on investment decisions in the oil and gas industry.
High marginal cost oil projects are being cut but to meet even declining future total oil demand as projected in the IEA's "450 Scenario" under which oil demand drops to 73.2m bbld in 2040, $4.9 trillion of investment is required to offset natural declines. This investment is going into low cost operations such as the Permian Basin where good companies will prosper even while aggregate oil demand is falling. This article fits tightly with Giant's investment philosophy, while we are focused on gas, oil continues to offer excellent opportunities for long term investment success.
Read the article here.