Today, the Vice President of BP Russia Vladimir Drebentsov said that there could be a deficit in the oil market by 2020 due to reduced investment in the 2014-2016 and a freeze of five-year projects.
Vestnik Kavkaza asked experts how realistic this forecast was in the long run and how it could affect the oil prices.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, explained that the situation will differ for different regions. "All traditional deposits tend to have a fairly extended investment cycle of 7-10 years. And the US shale projects are implemented fairly quickly. In the US, when oil prices decline below $45, it immediately causes a decline in production, but when it exceeds the threshold $45- $50 per barrel, the companies return to their production capacity," he said.
According to the expert, the current crisis will mean serious problems for other regions, especially in Europe, the North, the Norwegian and Barents Seas.
"There is a possibility that old fields will be able to partially cover this deficit due to additional procedures, drilling new wells. But in general, it will be a decline. The scale of this decline will depend on oil prices, whether it will be able to return to at least $80 per barrel. If it does not, respectively, there will be a huge decline in new projects in about 7-10 years," he pointed out.
However, according to a leading analyst of the National Energy Security Fund, the oil prices will be influenced by the US Federal Reserve rate. If it rises, then loans will become expensive, traders will not have money to buy securities on the stock market. The demand for oil futures will decline, respectively, the price of will decline as well," the expert explained.
According to him, now there are two opposing camps in the US. One urges to raise the rate to deal with the record in the last several years inflation. "The second camp warns that the rates increase will bring the oil prices down and close all the oil shale projects, making electricity and all goods and services produced in the US more expensive," the analyst said.
Speaking about alternative energy sources, the expert suggested that over time they will occupy their niche, especially in those regions where it is not profitable to lay a gas pipeline.
The expert stressed that alternative sources would not be able to replace hydrocarbons on a global scale. "They are in demand in developed countries, in Europe, due to the fact that oil and gas prices were high there, and because oil and gas deposits in Europe are exhausted," the leading analyst of the National Energy Security Fund noted.
At the same time he pointed out that there is nothing left for these states but to develop renewable energy sources. "As for the rest of the world, of course, there is a certain development of renewable sources, but they are not competitive as compared to traditional ones," Igor Yushkov concluded.
An associate professor of the Graduate School of Corporate Management of RANEPA, Ivan Kapitonov, in turn, questioned whether the BP's forecast was realistic.
He explained that changes in the geographical structure of the oil suppliers is the more likely scenario. "It is expensive to develop traditional deposits and it takes a lot of time. As for the US, the frozen wells can become operation again very quickly if the prices change. Therefore, probably there will be no sharp deficit," the expert said.
According to the analyst, giving such a forecast, BP, rather, intended to support the oil price. "BP gave a newsworthy for the growth of oil prices, and we will see the adjustment in the market literally tomorrow, maybe even today," he said.
Speaking about other factors which determine oil prices, Kapitonov named the weakening of the dollar in the market. "Now, many countries refuse from the US debt, which would undermine the US economy, as a result the oil price in dollars will increase. Of course, it will affect the oil market positively. In the future, the growth of world economies may continue, the demand in China will increase," the senior researcher of IE RAS believes.
In his opinion, alternative energy sources will not have a significant impact on the situation, "They still do not cover needs of main consumers in traditional fuel energy resources, I mean cars and powerful traditional generation, which is needed for plants and for the industry. They are only capable to slow down the demand in traditional energy sources," the expert noted.
"I would like to see that at a combination of these factors the price will increase to the level of more than $100 in the five-year term," Ivan Kapitonov concluded.
