ST.PETERSBURG, Jun 7 (PRIME) -- The long-term stability of oil supply is under threat because of the lack of financing due to short-spanned interests of some of investors, CEO of Russian oil major Rosneft Igor Sechin said at the St. Petersburg International Economic Forum on June 5.
"Long-term stability of oil supplies is under the risk due to the lack of investment. The companies have become dependent on the situational interests of some groups of investors," Sechin said.
He added that some stakeholders force companies to abandon investment in oil and gas and some majors companies raise the shareholder value by raising dividends and buying back shares. As a result, the oil producers develop only the projects that are beneficial in the short term.
According to Sechin, oil companies need to change relations with investors. "It seems that the companies have to change the mode of relations with the external world because investors pay more attention now to such aspects as environmental programs, investment in carbon neutrality, green rebranding and spending on the buyback of shares, rather than fundamental financial and operating figures that allow us to assess the current and future business prospects," he said.
He added that subsidies for green energy and small investors are a new threat for the oil market, while the sales of dirty assets to small companies do not cut emissions.
Sechin said that the growth of oil and gas reserves has lately been at historical lows, which is why the world can soon face serious oil deficit. Demand for oil is to recover as long as vaccination continues. The oil share in the energy balance will decline but consumption will increase.
New players can emerge on the Russian oil market and medium-sized companies can rise, the official said.
The CEO separately said that Russia’s environmental regulation is much stricter than in the U.S. and that the global market must reject oil produced at environmentally harmful projects, such as shale. The development of economically feasible technologies cutting emissions will take decades.
Rosneft is discussing the launch of a fund cutting carbon footprint in the energy sector, Sechin said.
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