Royal Dutch Shell CEO Ben van Beurden said on Tuesday that signs of an oil price recovery are emerging, but it will take time for the market to rebalance.
“ I see the first mixed signs for a recovery in oil prices ,” van Beurden told the Oil & Money conference in London.
“ But with US shale oil being more resilient than we originally thought and a lot of oil still in stock, it will take some more time to rebalance demand and supply ,” he added.
Global oil prices have fallen for more than a half since last year putting a major pressure on the oil and gas industry.
The drop in oil prices is also having big impacts on international LNG prices and is causing a slowdown in the development of LNG projects with companies even cancelling their projects as they are not sustainable in this price environment.
However, Shell is in the midst of a $70 billion takeover of BG Group which, once completed, will create the largest LNG player in the history of this relatively young industry.
Hague-based Shell now produces more gas than oil and has also been eager in promoting the fuel as a cleaner alternative to coal, which dominates electricity output worldwide.
“ Gas is a fossil fuel, yes, but a crucial one for building a low-carbon future ,” van Beurden said.
When burnt for power, gas produces around half the CO2 and one-tenth of air pollutants that coal does.
“ A switch from coal to gas in power plants improves air quality today and helps deliver a sustainable energy system tomorrow – together with renewables ,” he added.
LNG World News Staff