At current rates of emissions, the total carbon budgets to limit temperature rise to 1.5 and 1.75 degrees Celsius will be exceeded in 13 years and 24 years respectively.
Yet, since 2011, global proved reserves of oil and gas have increased, and amount to some 50 years at current production. Despite public statements to the contrary, none of the majors' emissions targets are found to be aligned with the Paris Agreement.
The report "Balancing the budget: Why deflating the carbon bubble requires oil & gas companies to shrink" analyses current and future projects to identify which would still be economic in a 1.6 degrees Celsius world using the International Energy Agency's Beyond 2 Degrees (B2DS) scenario, in line with the Paris commitment to limit global temperature rise to "well below" 2 degrees Celsius.
Building on previous work, the report extends the concept of the global carbon emissions budget to the company level using new project-level emissions data from Rystad Energy to set out "company carbon budgets".
Mike Coffin, oil and gas analyst at Carbon Tracker and report author, said: "If companies and governments attempt to develop all their oil and gas reserves, either the world will miss its climate targets or assets will become 'stranded' in the energy transition, or both."
"The industry is trying to have its cake and eat it reassuring shareholders and appearing supportive of Paris, while still producing more fossil fuels."
"This analysis shows that if companies really want to both mitigate financial risk and be part of the climate solution, they must shrink production."
The report finds that the majors would need to cut group production by 35 per cent by 2040 to align with this goal but the picture differs widely between companies depending on the proportion of low-cost, low-carbon projects in their portfolio.
It also warns that other fossil fuel producers, especially those with undiversified portfolios, may need to make much deeper cuts.
The main findings include none of the majors are on track to be aligned with Paris by 2040; ConocoPhillips faces the biggest production cuts of 85 per cent; ExxonMobil, the biggest oil major, would need cuts of 55 per cent; Eni requires cuts of 40 per cent, Chevron and Total both 35 per cent, and BP 25 per cent; and Shell's portfolio is most aligned but it would still need cuts of 10 per cent.
Exxon, Total and Conoco have few low-cost, low-carbon project options that would be economic in a 1.6 degrees Celsius world.
( With inputs from IANS )