CEO sees oil demand continuing to grow despite
the transition
Only ‘environmentally unfriendly’ projects should
be rejected
Russian oil giant Rosneft PJSC warned of an
impending shortfall in supply as global producers increasingly channel funds
into a “hasty” energy transition.
“The world risks a severe deficit of oil and
gas,” Rosneft Chief Executive Officer Igor Sechin said Saturday at the St.
Petersburg International Economic Forum. “The world consumes oil, but isn’t
ready to invest in it.”
His comments echo those of Russian Deputy Prime
Minister Alexander Novak, who this week rejected calls for a rapid shift away
from oil and gas, saying starving the industry of investment would harm the
global economy. But fossil-fuel producers are facing mounting pressure to
switch to cleaner forms of energy as governments step up efforts to prevent
damaging climate change.
“It shouldn’t be about rejecting oil, but about
rejecting crude from environmentally unfriendly projects,” Sechin said on an
energy panel that also included BP Plc CEO Bernard Looney and Glencore Plc boss
Ivan Glasenberg. “Oil consumption will continue to grow despite a relative drop
in its share in the global energy mix.”
The discussion comes in the wake of a
controversial road map published in May by the International Energy Agency,
which urged an end to new oil and gas investments to avert disastrous climate
change. The report was dismissed by petrostates Saudi Arabia and Russia, with
Novak warning of skyrocketing prices. Sechin said it will still take decades to
develop economically efficient green technologies.
“Some ecologists and politicians urge for a
hasty energy transition, yet it requires an unrealistically fast launch of
renewable energy sources and faces issues with storage, ensuring reliability
and stability of power generation,” he said at the forum.
Instead, oil and gas producers must allocate
sufficient funds to avoid further depleting resources that are already
dwindling in many regions and threatening the future stability of supply, he
said.
“Based on existing estimates, about $17
trillion should be invested in the global oil and gas sector to support current
output levels until 2040,” the CEO said. “That’s about a third of all global
energy investments.”
Bloomberg