The pandemic will likely bring forward that peak and discourage exploration, according to Rystad Energy. The consultant expects about 10 per cent of the world's recoverable oil resources — some 125 billion barrels — to become obsolete.
Premier Oil, Rockhopper's partner, suspended work on Sea Lion earlier this year, and on July 15 wrote off US$200 million of investment because later phases looked unlikely to happen. The pressure to curb emissions may also prompt companies to leave the most carbon-intensive reserves in the ground, as France's Total acknowledged last month when it took an US$8 billion writedown on carbon-heavy assets.
Sunrise is more complex and more costly. The deposit is too deep to be dug up, so instead it's injected with steam to get the bitumen flowing into a well, from where it can be pumped to the surface. Beyond their economic viability, carbon-intensive oil sands also sit uncomfortably with BP's ambition to become a"net-zero" company by 2050. No new oil-sands projects fit in a world compliant with the Paris climate accord, according to Carbon Tracker.
It pointed to the involvement of other companies — Premier joined the project in 2012 and Navitas Petroleum is in talks to take a stake — to suggest there's little risk Sea Lion will become a stranded asset.