Much has been made about oil supermajors slashing spending. Shell even cut its dividends by two thirds, the first time the Anglo-Dutch company has done so since World War Two.

Last month, Shell said it would lower its spending by $US5bn ($7.8bn) and suspended its massive share buyback scheme in order to weather the collapse in oil prices.

Long-time rival BP has also announced plans to cut capital spending by 25 per cent to $US12bn while ExxonMobil lopped off $US10bn from its 2020 spending to $US23bn.

More recently, Chevron has slashed its capital spending for the second time in five weeks, with the company saying that full-year spending could be as much as 13 per cent lower than previously planned.

None of this is particularly surprising given the impact that the COVID-19 pandemic  has had on oil prices.

The US-centric West Texas Intermediate crude for June delivery is currently trading at $US18.76 per barrel while the broader Brent Crude benchmark is at $US26.06 per barrel.

This is far cry from prices of $US61.06 and $US66 per barrel respectively at the beginning of this year.

What is of interest is that both BP and Shell have flagged that their investments in renewable energy would be left largely untouched.

Of the other oil giants, French supermajor Total has also said it would not cut spending on its new energies division despite chopping more than 20 per cent from its capital spending.

Shell chief executive officer Ben van Beurden said last week that while a quarter of its planned $US5bn cuts would apply to its integrated gas and new energies business unit, gas projects would face the brunt of the cuts.

“I wouldn’t say we have ring-fenced them; that would be too much,” Greentech Media quoted van Beurden as saying.

“There is an energy transition underway that may even pick up speed in the recovery phase of the crisis, and we want to be well-positioned for it.”

The supermajor has also committed to a net-zero emissions target for 2050, making it the second major European oil company after BP to do so. This includes the reduction of ‘Scope 3’ emissions, which account for 85 per cent of the company’s total carbon footprint.

Scope 3 emissions are all indirect emissions that occur in the value chain of the reporting company.

Shell plans to achieve this by emphasising gas over oil and expanding its already sizeable renewables business.

Likewise, BP’s new chief executive officer Bernard Looney said the company has left $US500m of low-carbon investment unchanged and untouched this year.

He noted that while oil price had crashed, its solar energy subsidiary Lightsource BP was involved in 400 megawatts of solar contracts in the US.

“That sector continues to attract investment. It attracts investments because of its risk profile and its resilience,” Looney added.

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