The president of the oil and gas company BHGE told CNBC on Monday that the oil and gas will remain key energy sources despite the existence of shale and other alternative energy resources.
Lorenzo Simonelli told CNBC on the sidelines of the World Petroleum Congress in Istanbul that “When you look at the energy requirements, the increasing population, we feel there’s going to be a necessity from an oil and gas perspective as we go forward.”
He added “LNG (Liquefied natural gas) continues to grow at 3 to 4 percent, oil continues to grow at about 1 percent, and you’ve got natural gas growing at 2 percent, as you look long term that supply-demand balance is going to be there. What we’ve got to focus on is making sure that we drive productivity through the value chain to let the investments go forward.”
The investment on oil and gas has lessened and given subdued market prices in the last few years. The Chief Executive of Saudi Aramco Amin Nasser, said on Monday in Istanbul, that the worlds could soon face a shortage of oil supply because of the low level of investment, Reuters reported. He further added that it is too early to know that the other energy resources like shale gas will be able to grow at a fast sufficient pace to replace the oil and gas.
The oil prices rebounded on Monday morning after dropping as much as 3 percent in the previous session. The unremitting drills activity in the U.S. and threats from some countries who committed to the OPEC output cap deal nervous the commodity markets.
For example, Kazakhstan has said it wants a steady leaving from the OPEC’s output cap deal. The other countries like Russia and the other members of OPEC pledged to reduce output until March of the next year.
Simonelli from BHGE told CNBC, “Clearly we look at the price of oil, at the same time, it’s only one of the data points we look at. What we’re focused on right now is really driving the costs of synergy and revenue synergies.”
The OPEC upcoming ministerial committee meeting will be on July 24 and all the market players are looking at it and expected that the oil group will not discuss any more cuts.