BAKU, Azerbaijan, Jan. 20
By Leman Zeynalova - Trend:
Low-carbon electricity will undoubtedly move to centre stage in the future energy mix, Trend reports citing the International Energy Agency (IEA).
But investment in oil and gas projects will still be needed, even in rapid clean energy transitions, IEA said in its Oil and Gas Industry in Energy Transitions report.
“If investment in existing oil and gas fields were to stop completely, the decline in output would be around 8 percent per year. This is larger than any plausible fall in global demand, so investment in existing fields and some new ones remains part of the picture,” reads the report.
IEA believes that in some cases, company owners may favour sticking with a specialisation in oil and gas – possibly shifting more towards natural gas over time – for as long as these fuels are in demand and investment returns are sufficient.
“But these companies will also need to think through their strategic response to new and pervasive challenges. The stakes are particularly high for national oil companies charged with the stewardship of countries’ hydrocarbon resources – and for their government owners and host societies that typically rely heavily on the associated oil income,” said the report.
“National oil companies account for well over half of global production and an even larger share of reserves. Some are high performing, but many are poorly positioned to adapt to changing global energy dynamics. Global energy trends have prompted a number of countries to renew their commitment to reform and to diversify their economies, and fundamental changes to development models in many major resource holders look unavoidable. National oil companies can provide important elements of stability for economies during this process, if they are operating effectively and alert to the risks and opportunities.”
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