Shell says peak oil production is behind it: Here's what comes next

Oil production has peaked, and the only way now is downhill for fossil fuels, Shell has conceded, with the energy company aiming to replace that business with renewables and low-carbon options instead. Total oil production peaked in 2019, Shell confirmed today, while the company's total carbon emissions peaked the previous year.

Unsurprisingly, then, Shell's focus is on jumping from oil and gas to other sources of energy – and profit. By 2050, Shell says, it aims to reduce its net carbon emissions by 100-percent compared to its 2016 baseline. Along the way, that includes a 20-percent cut by 2030, and a 45-percent cut by 2035.

Production of traditional fuels is on track to be cut by 55-percent by 2030, Shell said today. It'll more than halve the number of refineries it operates, from the current 13 sites down to six. Oil production is expected to decline 1-2 percent each year from now on, "including divestments and natural decline," Shell suggests.

It's a tumultuous time for global oil demand. The appetite for gasoline and similar products has slumped, as the ongoing COVID-19 pandemic wiped a huge amount of travel off the calendar while coronavirus was tackled. Meanwhile, pressure in most countries to shift to zero-emissions vehicles, such as battery-electric cars and trucks, has further accelerated the decline in oil demand.

Still, that's not to say oil is going away any time soon. After all, Shell produced just short of 1.9 million barrels of oil each day in 2019, the company says. It will still be spending a considerable amount on locating oil and drilling it out, with $8 billion each year earmarked for that. In contrast, $2-3 billion will be spent on renewable energy options.

Part of that will include building out its electric vehicle charging points. Currently there are around 60,000 of those in operation around the world, Shell says, having partnered with providers like IONITY in Europe. It's now targeting 500,000 locations by 2025.

Hydrogen, too, will be part of Shell's focus. That'll include integrated hydrogen hubs, the company says, though focused on industry and heavy duty transport customers more than individual drivers of fuel-cell powered cars. Currently, Shell has just three hydrogen stations operational in the US, all in California.