Oil companies must increase their investment in conventional fossil fuel resources or risk a new spike in crude oil prices that will accelerate the shift to renewables, the chief executive of Total has said.

Patrick Pouyanné said deep cuts in capital expenditure by oil companies since prices crashed in 2014 would lead to tighter supplies in years ahead.

He cited data showing that the annual number of new oil and gasfields given the go-ahead had fallen from an average 35 between 2010 and 2014 to just 12 since 2015. This has reduced the amount of new production capacity added each year from 2.5m barrels per day (bpd) to about 1m.

“It may have been a bit high before but to add 1m barrels, that’s probably not enough,” he told an industry conference in London. “Post-2020, we will face an issue with this low number of [new projects].”

Mr Pouyanné said the near-term outlook remained uncertain, with upward pressure on prices caused by growth in demand and cuts in supply by Opec producer nations countered by rising output of “unconventional” US shale oil. However, US shale resources would not be able to keep pace with demand in the long-run, he said.

Crude prices have hit two-year highs just below $60 a barrel in recent weeks, more than double the 12-year lows recorded early last year.

Mr Pouyanné said Total and its peers were happier operating at current prices than at the peaks above $100 before the 2014 crash. A return to higher prices would risk unravelling hard-won improvements in cost discipline and reduce the competitiveness of oil and gas against alternative energy sources.

“$100 per barrel would be bad news,” he said, recalling how prices above that level before 2014 “opened the door to other technologies” such as US shale and renewable energy.

Total will play its part in replenishing the industry’s project pipeline, said Mr Pouyanné, adding that the company plans to approve development of the Libra offshore oilfield in Brazil by the end of this year.

He also remains keen to press ahead with expansion of the South Pars gasfield in Iran despite US President Donald Trump’s decision last week not to renew his certification of the international deal to halt Tehran’s nuclear programme.

Mr Pouyanné said Total — the first global energy group to agree an investment in Iran after the 2015 deal — would consider its options after the US Congress decides whether to reinstate sanctions.

He was optimistic a way forward could still be found, citing “quite a number of stakeholders” in the US keen to keep the Iran nuclear deal alive. “If we can legally execute the contract we will execute the contract; that is very clear,” he said.

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