KEY CONCLUSIONS:
- The share of hydrocarbons in the energy sector will be going down, and their consumption will be going up
"Talking about the role of hydrocarbons <...> we probably won't witness the peak demand <...> Their share in energy consumption will be going down to a certain extent <...> but absolute figures will be going up," said Alexander Novak, Minister of Energy of the Russian Federation.
"We believe that oil and gas will be with us for a long long time," said H.E. Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia; Chairman of the Board of Directors, Saudi Arabian Oil Company (Saudi Aramco).
"Think of aviation, think of shipping, think of petrochemicals, think about any other manufacturing process that requires high temperature and very intensive heat. And therefore I think there is still a role for hydrocarbons," said– Ben van Beurden, Chief Executive Officer, Royal Dutch Shell Plc.
- OPEC intends to implement the Paris Agreement on CO2 emissions mitigation
"Five of our member countries, including Saudi Arabia, have already ratified the Paris Agreement. In fact, all of our member countries have signed it, and we are determined to proceed with our obligations," H.E. Mohammad Sanusi Barkindo, Secretary General, Organisation of the Petroleum Exporting Countries (OPEC).
- Oil and gas companies rely on innovative technology
"Companies will change their plans. <...> The OGCI is putting billions of dollars into research," said Daniel Yergin, Vice Chairman, IHS Markit.
"Eventually investments will be going into sustainable technologies, because those technologies will just be more efficient than some of the <...> existing ones," said Kirill Dmitriev, Chief Executive Officer, Russian Direct Investment Fund.
CHALLENGES:
- Depletion of resources
"Even without transition or climate change, we would be ultimately facing depletion of resources," said H.E. Khalid A. Al-Falih.
"Every resource, and of course there are long-life resources as well, but every oil and gas resource is subject to depletion," said Ben van Beurden.
- The need to meet the growing energy demand while mitigating the emissions
"On the one hand, we need to reduce CO2 emissions, mitigate the greenhouse effect, on the other hand, as we all well know, the world is developing, the world population is growing and will continue to grow in the future, <...> and economies will be growing, too. <...> All of this requires additional volumes of energy," said Alexander Novak.
"The first fundamental that consumers want is cheap energy, <...> it depends <...> on plenty of new technologies including renewables. <...> We have decided that we want to be out <...> we want to stay a major energy company in this sector in 20–25 years," said Patrick Pouyanne, Chief Executive Officer, Chairman of the Board, Total.
SOLUTIONS:
- Diversification
“Being a shaper of the fourth industrial revolution, Saudi Arabia may be perceived as a developing economy that is resource-rich, but we also have ambitions to get ahead in innovation. Some investments are being made by our public investment funds <...> We are investing heavily in our own country, in innovation, research and development to shape the future transitions not only in energy but new technologies that will accelerate the diversification,” said H.E. Khalid A. Al-Falih.
We are a commercial organisation... <...> we have to make investments that are commercial, <...> and there is no doubt, and I think it’s the same for Total and Shell. We have strategies which are flexible and will move as this transition comes,” said Robert Dudley, Group Chief Executive, BP.
“We will be able to do more to capitalise on some of the transition opportunities. <...> Gas, for example, international gas will be an area of interest for us, and we’ve explored that around the world, and we have explored it here in Russia. <...> We will also invest in renewables, in electric generation,” said H.E. Khalid A. Al-Falih.
- Maintaining the investment
“We’ll continue to have to invest in this sector [oil] in order to just have supply meet demand. Because if we would stop investing right now, which is what a lot of advocates against our industry would propose, the rate with which supply will come down is much faster than we would ever want it, even under the most most aggressive RES scenario,” said Ben van Beurden.
- Alternative use of hydrocarbons
“We tend to forget that oil is more and more often used in petrochemicals, in manufacturing consumer goods. Nine out of ten goods at present are made using petrochemical products <...>. And whereas now it is 11 million barrels allocated for petrochemistry, in about 15 years, under the most modest assumptions, the petrochemical industry will use 17 million barrels, and even more than that going forward, and accelerating at that,” said Alexander Novak.