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FSUOGM POLICY FSUOGM

Sechin warns clean energy could

cause oil shortages

RUSSIA ROSNEFT’S powerful CEO, Igor Sechin, has global majors and result in resource base deple-
warned that oil shortages could emerge as the tion,” he said. “The world runs the risk of facing
Western oil and gas world axes investment in hydrocarbon produc- an acute deficit of oil and gas.”
majors have come tion in favour of increased renewables spending. Sechin’s comments were also a round rejec-
undert he most Financiers across the world have pledged tion of a recent IEA report, which concluded
pressure to make their to end support for oil and gas developments, that if the world is to achieve net-zero emissions
operations cleaner. while international oil companies (IOCs) have by 2050, no further upstream investment is
unveiled plans to scale back fossil fuel extraction needed beyond projects that have already been
and build up their clean energy capacities. The approved.
International Energy Agency (IEA) and others Western oil and gas majors have come under
have warned that oil demand may never recover the most pressure to make their operations
to pre-pandemic levels – a position that Sechin cleaner, as demonstrated by the recent Dutch
has rejected. ruling that requires Royal Dutch Shell to fast-
“With the growing scale of vaccination and track emissions cuts. There are expectations
reducing impact of the pandemic on the global that national oil companies (NOCs) like Rosneft
economy, the demand for oil will recover and we could fill the void in oil supply left over as IOCs
have to be prepared for that,” the oil boss said at scale back.
a discussion at the St Petersburg International “The reduction of oil and gas production by
Economic Forum (SPIEF). the majors, coupled with the failure to deliver
“Nevertheless, the long-term stability of oil enough solar and wind energy to the market,
supplies is at risk due to underinvestment,” he could lead to a new wave of mergers,” Sechin
continued. “This is due to both requirements of said. “Consolidation of the majors would allow
various stakeholders to completely cease invest- them to increase investments in the energy
ments in the petroleum sector and the aspira- transformation, strengthen their competi-
tions of majors to increase shareholder value and tive position and improve their investment
shareholder returns through stronger dividend attractiveness.”
payout and share buyback.” The CEO of commodities trader Trafig-
Sechin noted that global oil and gas reserves ura, Jeremy Weir, echoed Sechin’s sentiments.
have been at their historical lowest point for sev- Speaking on the same energy panel at SPIEF, he
eral years. warned that “possible energy shortages could be
“This trend may become a ‘new norm’ for a significant barrier to economic recovery.” ™

P10 www. NEWSBASE .com Week 24 16•June•2021