BAKU, October 27. /TASS/. The causes of the current energy crisis in the world are not related to the events in Ukraine, rather it is being brought on by a lack of investment in the oil and gas sector and Western nations' rejection of Russian hydrocarbons, Rosneft CEO Igor Sechin said on Thursday at the 15th Verona Eurasian Economic Forum in Baku.

Sechin talked about the destruction of a single energy market, said that Europe had lost the opportunity to diversify the supply of resources because of sanctions, and stressed that the idea of "cutting" Russia out of the world economy is "absurd and illusory".

Energy and dollar crisis

The yen, the pound sterling and the euro have been hardest hit by the US Federal Reserve’s current policies and may end up getting sacrificed in a crisis ‘inferno’ for the salvation of the dollar, Sechin believes.

"So far, they [the Fed] have been most apt at using these resources, even by manipulating the dollar against their allies. Thus, the yen, the pound and the euro are hardest hit by the Fed’s policies. It is these currencies that risk going down in a blazing inferno of the crisis in order to salvage the dollar," he said

Meanwhile, investments in the renewable energy, which amounted to $2.6 trillion over the past seven years, have led to underinvestment in conventional energy and the current state of the global energy market, he said. "Huge investments in renewable energy, which exceeded an enormous $2.6 trillion over the past seven years, have not paid off - the share of renewable sources has grown by only 3 percentage points over the same period. This is the reason for underinvestment in conventional energy and the current state of the global energy market," Sechin explained.

Meanwhile, he believes that the global energy deficit may soar seven-fold by 2030 with current investment trends persisting. "With the current investment trends persisting, the global energy deficit observed in 2022 will soar seven-fold by 2030. It is necessary to increase investments in traditional energy by an average of $100 bln per year by 2030, including by $44 bln in the oil sector, to liquidate this deficit," Sechin said.

Investments in the oil and gas sector should rise by 20% by 2030, according to Bernstein’s analysts, he added.

‘Shadow’ shareholder

British multinational BP remains Rosneft’s shareholder, with $700 mln worth of dividends for second half of 2021 transferred to the company’s account, Sechin said.

"Despite the high-profile declarations made on February 27 by BP’s board of directors about the decision to divest from Rosneft, the company has not complied with that resolution. And despite all the rhetoric, it remains a ‘shadow’ shareholder, not participating in the work of the company’s management bodies, maintaining all rights and corresponding dividends. I would like to take the opportunity to notify our friends from BP that their dividends for 2H 2021 in the amount of $700 mln have been transferred to accounts that have been opened for them," he disclosed.

"Let me mention that BP’s revenues from participating in the share capital and joint ventures with Rosneft have already reached $37 bln with the total investment of around $10 bln. I believe this is excellent compensation for the capital invested," Sechin added.

Anti-Russian actions

Sechin believes that imposing oil and gas price caps not only undermines market fundamentals but also revokes the sovereign rights of countries to their resources. "Introducing caps is an attack not only on market fundamentals, but also on the fundamentals of sovereignty, meaning the idea is actually to abolish the sovereign rights of countries to their own resources because ‘right’ countries, which lack resources, need them more than ‘wrong’ ones. The US itself is, of course, not affected by any sort of restrictions," he noted.

A number of European experts and politicians are openly accusing the United States of the fact that it is profiting from the energy crisis that it has triggered, and benefiting from its allies’ problems, Sechin said, noting that gas prices in the US are 80% lower than in Europe. "Nevertheless, European officials offer their reasoning for the energy crisis, which is far from common sense," he added.

Politics has fully wiped away economics throughout the world, with a single energy market and rules no longer existing, Rosneft chief stressed.

"The high volatility that has been observed over the last decade has now become limitless. The trends that we have outlined earlier and the ones that may arise unexpectedly, acting independently, without absorbing each other, are completely destroying the foundations of law, private property and the market like a hollow-charge projectile," he emphasized.

"The US aims to be the global leader with the help of diplomacy backed by the best fighting force in the world," Sechin concluded.

Meanwhile, Sechin called the idea of "cutting" Russia out of the world economy absurd and illusory. The West underestimates the scale and the contribution of the Russian economy in the global differentiation of labor, he added, noting that Russia's share in the supply of basic raw materials reaches up to 15%.

Vostok oil and trade with Asia

Rosneft continues to work on the Vostok Oil project, the company will be glad to see "its friends", including the Azerbaijani Socar, among the project participants, Rosneft CEO said. "The project’s implementation continues within the previously announced schedule. We will be glad to see all our friends, including Socar, among the participants in this project," Sechin said.

He added that a significant increase in oil reserves was confirmed in the course of exploration work on the Vostok Oil project this year. At the same time, the company continues to work on the project’s priority facilities.

At the same time, Russia’s share in India’s imports soared 2.5-fold in April and May 2022 to 4% through an increase in energy supplies, Sechin added. "A rise in energy supplies, notably, oil and gas, has largely boosted Russia’s share in the structure of Indian imports. During 2021 and 2022 financial years Russia’s share was 1.6%, whereas in April and May 2022 it reached 4%," he said.

According to him, India has become the world’s fifth-largest country in terms of GDP this year, demonstrating the highest growth rates among top economies, Sechin noted, adding that Rosneft is "the largest Russian strategic investor in the Indian economy."

Single market and hostile finance centers

Politics has completely destroyed the global economy, a unified energy market and rules no longer exist, Sechin believes. "There is no longer a single energy market. No regulations exist. The extreme volatility that has been seen over the past ten years has now no limits. The trends we previously described, as well as others that may emerge unexpectedly, each act independently and don't mitigate one another, fully destroying the pillars of law, private property, and the market," he said.

According to him, it is important to make a quick transition to economic cooperation within the framework of the EAEU, SCO, BRICS, without regard to financial centers from unfriendly countries. "Today it is vital to move to economic cooperation as soon as possible without regard to ‘unfriendly’ financial centers for participants in these processes. The priority is organizing clearing settlements, which other interested countries could join later," he said.

Sechin asserts that the investment shortage brought on by the difficulties of the "green" transition and secondary sanctions promotes the development of regional ties. The importance of fostering collaboration between developing markets is rising. "The countries of Southeast and Central Asia, Latin America, and Africa are increasingly focused on strengthening ties, cooperation with Russia, China, and India," he said.