BAKU, Azerbaijan, August 6
By Nargiz Sadikhova - Trend:
Over the next decade at least demand for oil likely to increase, Brenda Shaffer, a faculty member of the US Naval Postgraduate School told Trend.
Commenting on the current energy policy trends in the USA and Europe she noted that they create a boom opportunity for oil and gas companies outside the US and Europe.
"What is happening in the energy world in the West now? There is no significant global change in demand for oil and gas, while at the same time Western governments and parts of their publics are making it hard for oil and gas companies to operate in the West. So, with demand for their products still in place, companies outside Europe and the US will have a huge opportunity to profit, at least for the next 15-20 years when evidently there still will be ample demand for hydrocarbons," she said.
In addition, she added, some oil and gas companies in the West are selling profitable oil and gas assets in order to lower the emissions the companies produce. Thus, "it is a good time to buy up some of these assets. Many oil and gas companies in the West are buying up renewables, such as wind, at top dollar, and selling good oil and gas assets at low prices."
"What should be Azerbaijan’s strategy in dealing with likely changes in the long-term in demand for oil and gas? The best would be to make a profit as much as possible now and use those profits to invest in developing different industries, not necessarily related to energy. Some people assume that oil and gas companies should transform into renewable energy companies. But, this is not likely to succeed. Oil and gas companies have little comparative advantage in renewables and as utilities. The science of oil and gas is geology and chemistry. While future renewables are likely to develop in the fields of physics, mathematics, etc. There are few success stories of oil and gas companies that became very successful renewable companies. Best to profit from oil and gas as much as possible for next two decades or so, and invest those profits in non-energy related industries," Shaffer said.
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