Shell, one of the "supermajor" oil and gas companies, recently announced that they expect their oil production to drop 1-2% annually over the next ten years, meaning at the high end of their projection oil production will drop 25% in 10 years.   

In this video, Vikram breaks down Shell's strategic decision here. First, he explains that while one producer projecting production declines does not necessarily mean we've reached ''peak oil,'' he believes that Shell's scenario modeling is the best in the business, and that declining oil demand is indeed likely. Declining demand would point to lower production levels, unless prices fell dramatically (demand is a curve afterall!), and Vikram explains that he actually expects prices to rise somewhat, further pointing to declining use of oil.  

An area of Shell's announcement that has gotten less attention is their commitment to ''extending leadership'' in liquified natural gas by adding 7 MM tonne LNG production each year by 2025. Vikram explains that he believes this is designed to pair strategically with expanding green energy demand. Green energy, at present, requires "load leveling'' fuel sources to produce electricity when the sun is not shining or the wind is not blowing. By investing in LNG, they will be well served to provide this fuel source to countries like India, with growing energy demand, large green energy investments and little/zero domestic natural gas production.    Tune in to hear more!