Oil and gas will remain "critically important" energy resources through to 2040, Statoil ASA CEO Eldar Saetre said Monday at the oil major's annual autumn conference in Oslo.
In a statement released by Statoil, Saetre acknowledge that the oil and gas industry is currently facing "a tough reality" as global upstream investments are estimated to fall by 20 percent in 2015, but he insisted that oil and gas will continue to play an important role in the future energy mix.
"We know that energy demand is growing. We also know that renewable energy will have to meet most – if not all – of this increased demand. However, oil and gas will remain critically important energy resources. Even in a two-degree world we need oil and gas roughly at today's levels in 2040," Saetre said, referring to the two-degree limit that has become the targeted increase in global average temperature agreed by climate change policy formers around the world at Cancun in 2010.
Statoil said that in advance of the COP21 climate summit in Paris, Saetre emphasized the action needed from policy-makers to set the course through effective policies and from the business doing most of the job in order to solve the global climate challenges; to meet the increased demand for energy and at the same time reduce emissions.
So far the commitments before COP21 in Paris are not sufficient for the world to reach a two-degree target.
"But there are weak signals that give cause for optimism. On the political side there is stronger willingness and commitment from some of the big players, including US and China. On the business side I see a growing recognition that the time has come to act and engage," Saetre said.
Saetre noted that energy demand is growing and emissions must be reduced, which should lead to large shifts in energy use and production. At the same time lower oil and gas prices are causing a rebalancing of supply and demand, putting an increasing premium on being a low-cost producer.
"Combined, this dynamic will create a turning point for the industry. The companies and countries that show they can successfully tackle these challenges will be the new winners. Statoil’s response is to capture the opportunities and actively shape the future of energy," Saetre said.
Based on this, the Statoil CEO has set three clear priorities for the company going forward.
"First, we need to be competitive at all times and create a company that can operate profitably even in today's commodity environment. Second, Statoil will set an example for how the oil and gas industry must transform. Our industry was unsustainable at 100 dollar oil. That's why we need to embrace simplification and standardization, but also collaborate and share solutions to solve joint problems," Saetre said.
"And thirdly, I want Statoil to be an energy provider for a low-carbon future. Oil and gas will remain a critically important part of this future. We want to be the world's most carbon-efficient producer of oil and gas and we will increasingly use our competence in new areas."
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