Offshore Energy Exhibition and Conference on Tuesday hosted a keynote speech by Paul Appleby, BP’s head of Energy Economics, who presented a brief version of BP’s Energy Outlook.
The BP Energy Outlook is a renowned annual report that informs discussions about future energy needs and trends.
According to Appleby, BP assumes the world’s economy to grow at historical rates, meaning the world economy will roughly double by 2035. This, in turn, will lead to the energy demand to grow by a third. What is interesting, all of the increase in the demand of energy is coming from the fast-growing, emerging economies.
Appleby also sees quite a significant shift in the mix of fuels over the next twenty years, with fossil fuels remaining the main source of energy, with gas overtaking coal as the second largest fuel by the end of 2035.
Oil will grow steadily but will be losing share in the fossil fuel mix year after year. Renewables are seen as the fastest growing fuel source, with the share of renewables increasing from 3 percent today to about nine percent in 2035.
Bart Cornelissen, Partner of Monitor Deloitte said: “If we look at the industry over the last two years, it’s been pretty bad, with slashed market caps, and more than 300.000 people laid off, capex massively in decline, and credit ratings of almost every player down, and Final Investment Decisions in decline as well.”
For the supply chain sector, Cornelissen offered alternatives, such as renewables and the $17B decommissioning market in the North Sea. He pointed to the example of Fugro, a company which, he says, now does more seismic for the renewable energy sector than for the oil and gas.
On the decommissioning note, Cornelissen said there was an opportunity, but there was also a lack of capacity – equipment, vessels, yards – to accommodate such a large task at this time.
He highlighted some positive examples of proactive companies that have or are building capacity for this, such as Allseas’ Pioneering Spirit vessel, and Heerema’s under-construction crane vessel, Sleipnir.
Furthermore, he said Deloitte expects a drop in the E&P sector around the world over the next few years, however, he also said the E&P would grow in the Middle East, however, from a small base.
Speaking at the panel were also Fraser Weir, North Sea Asset Director, Centrica, and Rob van der Hage, Program Director Offshore Wind, TenneT.
When pressed by the moderator, Coby van der Linde, Director, Clingendael International Energy Programme, both of the speakers said they could imagine offshore wind turbines and offshore oil and gas platforms operating close to each other, which was not the case in the past.
On the offshore wind turbines, Van Der Hage said the coastal area in the Netherlands was too crowded with the projects already under construction there, meaning future wind farms would need to go further offshore, which does offer stronger winds, but also calls for more infrastructure.