ST. PETERSBURG, June 5. /TASS/. The lack of investment in oil and gas production and the western countries’ fascination with ‘green’ energy may result in a severe shortage of hydrocarbons on the global market in the future, Chief Executive Officer of Russia’s top oil producer Rosneft Igor Sechin said at the St. Petersburg International Economic Forum on Saturday.

He urged to replace the calls for abandoning oil for the sake of ecology with ensuring healthy market competition of all types of generation, which "guarantees stable provision of clean and affordable energy with the minimum environmental footprint."

Regionalization of markets, the appearance of another factor for strengthening of global multipolarity and the rising role of national currencies resulted from the coronavirus pandemic, coupled with the global economic crisis, Sechin said. "Each country is searching for its own way, particularly a way out of the pandemic," he said.

The way out of the pandemic will take at least 12-14 months, Rosneft CEO said, adding that this period of time is required to vaccinate 70% of the global population. Meanwhile, Russia’s oil and gas sector is transforming under the influence of the pandemic and a number of other factors, he noted. "We will definitely see new players appearing, as well as the growth of mid-sized companies and consolidation of the sector overall, in the near future," Sechin said.

"The growth of oil and gas reserves has been at an all-time low in recent years, and a certain deficit of resources is already obvious. The trend may become a ‘new norm’ for global majors and lead to depletion of the resource base. The world is facing the risk of a severe shortage of oil and gas," Rosneft chief executive warned.

He expects the oil demand to recover as the effect of the pandemic on the global economy subsides. "As a large-scale vaccination is underway and the effect of the pandemic on the global economy subsides the oil demand will recover, and it is necessary to be prepared for that. The demand for energy will keep rising in the future, and new infection waves may only slow down, but not stop the process," Sechin said.

However, around $17 trillion worth of investment in the oil and gas sector will be required by 2040 to support the current production level. "According to available estimations, investments in the global oil and gas sector worth around $17 trillion are required to support the present production level by 2040, which will equal to around one third of all global investment in the energy," he noted.

Sechin also questioned whether it is reasonable to develop ‘green’ energy at the scale often offered by the global expert community, adding that the aftermath of this fascination may be unexpected, for example, the possibility of environmental activists to manipulate the cost of large companies' shares.

The development of alternative energy will require huge investment, for example, the shift of 15-25% of the global energy to hydrogen by 2050 is expected to take $15 trillion, which equals to expenditures of the whole global oil and gas sector in annual terms. Moreover, Rosneft expects electric vehicles to be twice as expensive for consumers this decade as cars with traditional fuel types. "The shift to electric vehicles may become a problem for the European middle class as their price will be substantially [higher], almost twice as high as that of traditional cars, by the second half of the 2020s," Sechin said.

The rising demand for certain metals also raises hesitations about their current reserves’ sufficiency, CEO said, adding that an explosive growth of prices may be expected. "The necessity of a multi-fold increase in production of certain metals is of no small importance as well. The International Energy Agency estimated the growth of global demand for metals required for the rising production of electric cars and electricity storage this May. Particularly, the demand for lithium will soar more than 40-fold, whereas the demand for cobalt and nickel - roughly 20-fold by 2040," he said. "A high growth like that raises hesitations about the sufficiency of current reserves, as well as investment in exploration and production of those metals. Amid this background an explosive growth of prices is very likely," Sechin added.

"Healthy market competition of all types of generation that guarantees a stable provision of clean and affordable energy with the minimum environmental footprint to consumers, should become a basis of the balanced energy development," he emphasized.

Sechin considers the balanced development of the oil and gas and ‘green’ sectors quite possible. For example, in the Asian-Pacific region the growth of renewable energy facilities is higher than in Europe and the US several-fold, which does not replace concurrent development of traditional sectors there, he explained.

Rosneft Chief Executive Officer suggested that the global community introduce a transparent system of evaluation and certification of goods and services that will allow avoiding the movement of environmentally hazardous production to developing countries, instead of calling for abandoning hydrocarbons. He also stressed that there are sectors in the world much ‘dirtier’ than the oil sector, such as the textile industry, which nevertheless do not experience such pressure.