Sechin: Oil to remain basis of global energy sector in 20–30 years

VERONA, Italy, Oct 19 (PRIME) -- Oil will remain the basis of the global energy sector in 20–30 years, and rumors about its “death” are much exaggerated, oil major Rosneft CEO Igor Sechin said at the Eurasian Economic Forum on Thursday.

“I can assure you that rumors about the “death” of oil are greatly exaggerated. Oil will remain the basis of the global fuel industry for the next 20–30 years,” he said.

The oil market has managed to offset volatility of prices thanks to a reduction of production by some countries and a strong growth of demand for oil, but it is early yet to speak about great changes and a strong growth of oil prices should not be expected in the near future, Sechin said.

“But this balance is fragile and unstable yet – shale oil production in the U.S., with vast reserves of drilled, but not finished wells accumulated, can show a significant growth in 2018 and destabilize the market again. That’s why I think that we should not expect a splash of oil prices in the near future,” he said.

Shale oil producers will receive a positive cash flow no earlier than in 2020 if the oil price grows to U.S. $70 per barrel, he added.

Desynchronization of the investment cycle in the oil and gas industry with the global economic dynamics creates prerequisites for a future deficit of oil and increased volatility of prices, Sechin also said.

Domination of financial speculations under long-term interests of the industry’s development is one of the challenges on the oil market, he added.

“Domination of financial players and short-term speculations operations leads to excessive volatility of price indicators. Unfortunately, this brings damage to long-term interests of the industry.”

Rosneft remains the leader of the sector in terms of cost of production of hydrocarbons and its expenditures on oil production amount to around $2.5 per barrel, Sechin also said.

The total volume of Rosneft’s cooperation with leading global companies exceeds $500 billion, Sechin said.

Rosneft also has a serious intention to work in the Iraqi Kurdistan and Iraq on the whole, Sechin said.

“We have the most serious intention to work in Kurdistan and Iraq on the whole. Our interest in these projects is purely practical – this region has a large resource base with low cost of production and not fully realized potential.”

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