Global oil demand will gradually decline, giving way to gas and other energy sources, BP chief executive Robert Dudley told TASS on the sidelines of the World Economic Forum in Davos.
Dudley, who will leave the company at the end of March, said that amid growing production in the US, this will make it unlikely that cycles will repeat when oil prices reached $ 100 per barrel or even exceed this level.
“I think there will be a reduction in use of oil and coal over time. I think there will be advantaged oil economically and light oils, they will always be part of chemicals. I mean in coming time, for decades and decades, we will still be using oil to make pertochemicals, most certainly, but displacing fuel oils with natural gas or other things to generate power – it has got to happen,” said the head of the one of the largest oil and gas companies in the world.
“So we will see reduction in global oil demand as we get farther in the century, and in some places it may come down quite a lot. In some countries, if they outlaw the internal combustion engines, for example, to encourage electrification and e-vehicles, you will see oil demand drop in those countries, but globally I do not see that happening.”
High volatility in oil prices is also unlikely due to the emergence of a third player in the oil market - the US.
“It is, it has the highest production today. But everything is changing in terms of the price spikes and I think this is a downside, because now if the price goes higher because of shortages in other places, temporary blockages, the US can increase its production,” he said.
According to him, amid the great attention of the world community to the issue of the impact of oil projects on the environment, pressure on the business of mining companies will intensify.
ESG ratings (independent ratings evaluating the performance of industrial companies according to three impact factors: environment, social sphere and management) already make it difficult to attract financing for such projects, although, according to Dudley, this approach is "quite simplistic."
The introduction of bans on oil projects, which was much discussed in Davos, will not solve the problem of reducing harmful emissions, he said. The population of the Earth in the next 20 years, according to the UN forecast, will increase by another 2 billion people, which is equivalent to the appearance of another China and the US on the planet, and the world will need energy. Renewable energy sources now provide only 3-4% of the total demand. These will change the face of the industry in the next 10 years and turn today's oil industry workers into multidisciplinary energy companies that will invest a lot in technologies and projects that today are not as cost-effective as oil and gas projects, but allow minimizing environmental impact, he said.
