Russia’s Rosneft projects global oil shortages during “hasty” energy transition
MOSCOW - 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
CEO 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.”
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