Baku, Azerbaijan, Jan.30
By Leman Zeynalova – Trend:
There are enough recoverable resources available today to meet the entire world’s oil and gas demand for the next 30 years – twice over, said Bernard Looney, Chief executive, Upstream at BP.
“Abundance is here to stay – and with it, downward pressure on prices, even if other factors hold them up in the short term,” he noted.
Looney pointed out that oil prices are always affected by cyclical factors such as supply disruptions.
“But today, things are different. We are seeing some structural changes too. Shale has changed everything. It is not only cheap, but flexible, helping the market adjust quickly. And it is massive. It is estimated that there is more shale gas resource in each of China, Argentina and Algeria than in the US,” he said.
Another factor, according to Looney, affecting the oil prices is the transition to a lower-carbon economy.
“Only a tiny proportion of the world’s cars are electric today. But almost every forecast out there agrees that EVs will grow into the hundreds of millions as battery costs fall. We will also see many autonomous vehicles and more ride-sharing. The question is not if it will happen, but when,” he said.
Nevertheless, he said that the pace of change in oil demand is uncertain.
“Today, we cannot know what the impact on oil demand will be. The pace of change is uncertain. And there will still be demand from ships, trucks, planes and outside of the transport sector. But we know that there will be some impact – and we need to be ready,” added Looney.
Oil and gas have a future as part of a changing energy mix – but it is a different future, he believes.
“Demand for oil will continue to grow, but some discovered resources may never be developed. And only the most competitively produced resources will reach the market. Demand for gas will grow faster as it provides a lower-carbon alternative to coal for power generation and a major source of industrial and residential heating, as well as fuel for ships and trucks,” he said.
Follow the author on Twitter: @Lyaman_Zeyn