August 3, 2021

Brufau warns of a crisis in oil supply due to lower investment – La Provincia

Brufau warns of a crisis in oil supply due to lower investment - La Provincia


The president of Repsol,Antonio Brufau,has warned of a crisis in the supply of oil due to the cut in investment of companiesof the sector after the collapse of oil prices in 2014.

In a statement to the 'Financial Times' collected by Europa Press, Brufau points out that oil prices are currently at "high" levels, above $ 85 a barrel, even before having seen "the impact" of the lack of investment when energy companies stopped investing during the crisis.

Thus, it considers that oil, which is at four-year highs, could increase its price even more in the middle of theuncertainty about the additional production capacity.

"It depends on how much reserve capacity the OPEC producing countries have, and we do not think they have too much," says Brufau, who believes that, at best, the additional barrels would only reduce prices to $ 70 a barrel.

In this way, the president of the oil company estimates that, although there are several million barrels a day of reserves, "in two years this will be exhausted"

The executive stressed that now companies invest in the short term and must demonstrate that "the money (invested in projects) is worth it, very quickly".

"The life of our investments is now six to seven years"Brufau said, stressing that in the past the best companies in the sector were those with the largest proven reserves, but that has become" less important ".

Investing long-term in production is "illogical"

In this scenario of uncertainties regarding the future demand of fossil fuels, together with theimpulse of low energies in emissions and the electric car, the president of Repsol believes that continuing to make large investments in long-term oil production projects "is an illogical decision".

The strategic plan of Repsol contemplates investments of 15,000 million euros until 2020, of which 53% will be allocated to exploration and production and the rest to refining, chemistry, gas and generation of energy with low carbon emissions.

Although oil and gas are still the core of Repsol's business, Brufau points out, the group's strategic plan also contemplates2.500 million investments in clean energy.

Repsol has readjusted its business to give preference to gas over oil, as Brufau believes that it will have a greater weight in the generation of energy along with renewables.

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