Rosneft’s investments, in particular in the Vostok Oil project, are critical for the future of the global energy sector, said Jeremy Weir, CEO of Trafigura, speaking at the XIV Eurasian Economic Forum in Verona. He stressed that this project will ensure the timely and necessary production of gas and oil for the coming years.
Rosneft launched the Vostok Oil project in 2020. Currently, the project is the largest not only in the Russian, but also in the world economy. Its resource base is over 6 billion tons of premium low-sulfur oil. Vostok Oil includes 52 license areas in the north of the Krasnoyarsk Territory and in the Yamalo-Nenets Autonomous Okrug, where 13 oil and gas fields are located, including the Vankorskoye fields (including the Vankorskoye, Suzunskoye, Tagulskoye and Lodochnoe fields) and the Payakhsky clusters. At the end of 2020, Trafigura acquired a 10% stake in the project.
Weir also stressed that the rise in energy prices is noticeable around the world. The increase in gas prices since the beginning of the year amounted to 300%. In other markets, the cost of energy is also breaking records. “In general, this was expected, since the process of rapid recovery of the world economy after the pandemic is currently underway, which entails an increased demand for all natural resources,” says the businessman.
Weir believes that in addition to increased demand, there are other factors of global price increases. Among them is chronic underinvestment in key industries. This is a long term trend. Investment is declining despite rising demand. This can be seen in the oil and gas industry and metallurgy. For example, the gap between production and demand for cobalt is at least 15%.
The reason for the decline in investment is pressure on entrepreneurs to cut funding for projects related to fossil fuels. To meet the high demand for fuel, meanwhile, investment is needed in all forms of energy – both renewable and conventional.
“We must find a way that allows us, as responsible producers, to ensure the stability of energy supplies. Because without this we risk losing our current ecological and social status, ”Weir said. He believes that the government plays a key role here. It should ensure regulatory soundness and fiscal stability, as well as enable investment in infrastructure. The government must work with the private sector. We also need to think together how to ensure progress towards zero emissions by 2050.
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