Need for structural changes in economy and future of energy: Rosneft CEO

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SME Times News Bureau | 03 Nov, 2021
Igor Sechin, CEO, Rosneft has said the technological feasibility of the energy transition is one of the key issues in the discussion of the future of energy.

Igor Sechin, CEO, Rosneft, Hardeep Singh Puri, Minister of Petroleum and Natural Gas of India; Mohammed bin Abdulrahman bin Jassim Al Thani, Foreign Minister of Qatar; Bernard Looney, CEO, BP; Jeremy Weir, Executive Chairman and CEO, Trafigura; Robert Dudley, Chairman, Oil and Gas Climate Initiative (OGCI); Ivan Glasenberg, former CEO, Glencore; Neil Chapman, Senior Vice President; Exxon Mobil, and the others discussed the pressing issues of the energy industry, current trends and measures to further promote the global energy transition XIV Eurasian Economic Forum.

In his address, Sechin said the International Energy Agency estimates that, by 2050, about half of the technologies needed to achieve low-carbon development goals will still not be ready for deployment. The energy transition must be synchronized with the supply of energy, reliable supplies of metals and other materials, technological development, and the adjustment of consumer behavior.

"Without this, the basic concept reflected in the word 'transition' as a process evolving over time, will be unworkable", he added.

This year has clearly demonstrated that erroneous decisions in the area of climate policy can lead to serious negative consequences for the entire global economy and society, he said.

"Not only oil and gas companies are at risk, but also banks and investors who may in fact be prohibited from investing in oil and gas", he said.

While the world's leading oil and gas companies invested an average of $16 billion per year in exploration between 2011 and 2015, last year spending on hydrocarbon reserves replacement dropped threefold, to $5 billion.

As a result, the level of global oil and gas reserves replacement has been declining for the fourth year in a row, and risks of supply shortages are already factored into the prices, negatively affecting revenues of European and global consumers, Sechin said.

Production of metals and other materials required for low-carbon energy is often accompanied by high carbon emissions from extraction and processing.

According to the International Energy Agency, the greenhouse gas emissions from lithium production are three times greater than those from steel smelting. Nickel and aluminum have 7-8 times the emissions of steel, and rare-earth metals have 50 times the emissions of steel, Sechin said.