‘No quick fix’ for chal­lenges fac­ing oil ma­jors: BP’s chief

Kuwait Times - - BUSINESS -

Global oil com­pa­nies are fac­ing the twin chal­lenges of an abun­dance in sup­ply cou­pled with pres­sure to re­duce car­bon emis­sions and there is no “quick fix” so­lu­tion, the chief ex­ec­u­tive of BP said yes­ter­day. BP chief ex­ec­u­tive Bob Dud­ley said only a com­bi­na­tion of strate­gies would help oil ma­jors deal with the chal­lenges, as they come to terms with a pe­riod of pro­longed low oil prices.

Dud­ley ar­gued that while global oil de­mand was still ex­pected to rise by one third in the next decades, “what is new is the in­crease in sup­ply”, espe­cially due to the ex­ploita­tion of US shale reserves. “We now have abun­dant sup­ply. It’s a fact of life,” he told the World Pe­tro­leum Congress (WPC) in Is­tan­bul.

The sup­ply has pushed down crude prices to their cur­rent level of around $45 a bar­rel and Dud­ley noted that at the time of the last WPC gath­er­ing of en­ergy bosses in Moscow in 2014, the oil price had been $108. “We have half a cen­tury’s worth of oil and gas in our proved reserves alone. And there is much more out there,” he said, point­ing to un­tapped shale reserves in Ar­gentina, Al­ge­ria and China.

‘Low car­bon world’

Mean­while, after the Paris Agree­ment on com­bat­ing cli­mate change set tar­gets for re­duc­ing emis­sions, oil ma­jors need to “make our busi­ness fit for a low car­bon world”, he said. “These are two huge chal­lenges. There are no quick fixes, no overnight so­lu­tions,” said Dud­ley. “His­tory shows our in­dus­try has taken on these kind of chal­lenges many times be­fore and suc­ceeded,” he said. He warned against a “re­play” of past so­lu­tions.

“These new ques­tions need new an­swers,” he said. Dud­ley said so­lu­tions would come from oil com­pa­nies show­ing ex­cel­lence, re­li­a­bil­ity and safety in their oper­a­tions. BP learnt “a lot of lessons” since the 2010 Deep­wa­ter Hori­zon oil spill dis­as­ter, Dud­ley said. Com­pa­nies must also make sure re­sources were sus­tain­able through us­ing nat­u­ral gas and re­new­ables in the en­ergy mix. Growth in re­new­ables is surg­ing, he said, while adding, that “com­mon sense tells us re­duc­ing emis­sions can­not de­pend on re­new­ables alone”. Dud­ley said this un­der­lined the “the ad­van­tages of gas” in bring­ing an abun­dant and rel­a­tively clean en­ergy source to con­sumers. “There is a an en­ergy tran­si­tion un­der­way and we are go­ing to be part of it,” he said. — AFP

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.