The climatic policy and demand for oil: “Lukoil” scenarios

The climatic policy and demand for oil: “Lukoil” scenarios

Russian oil company “Lukoil” has presented some scenarios of change of demand for oil in the world within the limits of development of the climatic strategy which as it was announced, will be presented in the spring of 2022.

One of the main theses prepared by the company for presentation Basic tendencies of development of the world market of liquid hydrocarbons till 2035 consists that the future dynamics of demand for oil in the world will depend substantially on the climatic policy of leading economies.

Many experts consider that decrease in anthropogenous influence on the climate is impossible without large scale reduction of consumption of fossil fuels and transition to “green” energy.Banks and investors support transition to alternative energy sources and in some cases refuse to invest in the company with carbon trace.

And insufficient investment in the oil branch, according to the head of “Lukoil” Vahid Alakbarov, can lead price volatility in the energy market and negative affect rate of increase of world economy.

The scenario “Evolution” presented by “Lukoil” assumes forward development of world energy within the limits of the operating international energy policy, national programs and long-term plans of the companies. The scenario Equal possibilities is based on the assumption that rupture in an energy consumption level between developed and developing countries in the future will essentially be reduced.

The scenario “Climate” is generated, proceeding from that assumption that leading economy will undertake additional efforts for achievement of the purpose of the Parisian agreement on maintenance of rise of global temperature essentially below 2 degrees of Celsius by 2100 at the expense of investments in low carbon economy.

In the scenario “Evolution” we expect that demand for liquid hydrocarbons will increase from current 100 million to 110 million barrels a day.Thus gradual decrease in rates of increase of world demand for liquid hydrocarbons is expected.

If to make an assumption about increase of availability of individual transport at the expense of easing of ecological norms (the scenario Equal possibilities) world demand for liquid hydrocarbons should increase to 120 million barrels a day by 2035.

Toughening of the ecological legislation in leading economy is capable to lead to reduction of demand for liquid hydrocarbons.In the scenario “Climate” the peak of consumption of oil is necessary for 2027.

Till this time demand for oil will continue to grow, mainly because of sluggishness of structures of world motor car park though rates of increase will be slightly lower, than in the scenario “Evolution”, quotes INTERFAX forecast of experts of “Lukoil”.

Thus all scenarios assume essential growth of share of the renewed energy sources, the processed plastic, and the accelerated electrification of transport.

“Lukoil” the second after “Gazprom” in revenue volumes the private company in Russia, providing 2 % of world production of oil. “Lukoil” participates in realisation of projects on investigation and development of deposits in the territory Azerbaijan, Kazakhstan and Uzbekistan. The company management shows also interest in possibilities of development of hydrocarbon resources of Turkmenistan.

After signing by Turkmenistan and Azerbaijan the Memorandum of joint operation of major field on the Caspian Sea “Dostluk” in January, 2021, “Lukoil” suggested to invest in the project of its development.

At the February meeting of President Gurbanguly Berdimuhamedov with the head of “Lukoil” Vahid Alakbarov in Ashkhabad arrangements on development of the Turkmen-Azerbaijan deposit were reached. As the head of “Lukoil” assured, the company will do the utmost for realisation of this project qualitatively, according to ecological requirements and in the planned term.

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