Igor Sechin, Chief Executive Officer of Rosneft, delivered a keynote speech at 
the Energy Panel "Transformation of the Global Energy Sector" at the XXIV St. 
Petersburg International Economic Forum.

The event, sponsored by Rosneft, was attended by BP CEO Bernard Looney, 
ExxonMobil Senior Vice President Neil Chapman, CNPC Chairman and PetroChina 
Chairman Dai Houliang, OGCI Oil & Gas Climate Initiative Chairman Robert 
Dudley, ONGC Videsh Managing Director and CEO Alok Kumar Gupta and other 
industry representatives.

The head of Rosneft presented a detailed analysis of the global economy in the 
context of the pandemic and drew the attention of the energy panel to the 
underestimation by market participants of the risks of global instability.

With the growing scale of vaccination and reducing impact of the pandemic on 
the global economy, the demand for oil will recover and we have to be prepared 
for that, Igor Sechin said in his report.

The energy demand will keep growing, and new waves of virus disease can only 
slow down this process, but these cannot stop it, Rosneft CEO said. 
Nevertheless, the long-term stability of oil supplies is at risk due to 
underinvestment. This is due to both requirements of various stakeholders to 
completely cease investments in the petroleum sector and the aspirations of 
majors to increase shareholder value and shareholder returns through stronger 
dividend payout and share buyback.

As a result, oil and gas reserves additions have been at their historical 
minimum over the past years, so that certain deficit of resources can already 
be forecast. "This trend may become a "new norm" for global majors and result 
in resource base depletion. The world runs the risk of facing an acute deficit 
of oil and gas," Igor Sechin said.

According to him, the cornerstone of balanced energy development should be 
healthy, market-based competition of all types of generation, ensuring a stable 
supply of clean and affordable energy to consumers with minimal impact on the 
environment.

The reduction of oil and gas production by the majors, coupled with the failure 
to deliver enough solar and wind energy to the market, could lead to a new wave 
of mergers. Consolidation of the majors would allow them to increase 
investments in the energy transformation, strengthen their competitive position 
and improve their investment attractiveness, says the head of Rosneft. 

"Possible energy shortages could be a significant barrier to economic 
recovery," said Jeremy Weir, chairman and chief executive of Trafigura.

The head of Rosneft recalled that the investment community praised the Vostok 
Oil project.

Jeremy Weir, Chairman and CEO of Trafigura also said: "Investment in oil 
production has fallen to the point where existing reserves, far from being 
replaceable, are being depleted. In this context, Rosneft's investment in 
Vostok Oil, the largest mainland oil and gas production project, is 
particularly significant. We at Trafigura are proud and honoured to be part of 
it. Vostok Oil is already producing low-cost, low-carbon, high-quality oil that 
will be in demand for years to come. Rosneft plans to reduce its carbon 
footprint and this will certainly guarantee demand for Vostok Oil's products," 
says the Trafigura executive.

In line with the highest environmental standards, Rosneft is implementing a 
number of first-class oil and gas projects with low unit production costs of 
USD 2.6 per barrel of oil equivalent.

"We are ready to share the success story and welcome Western and Eastern 
partners, equipment and service providers with their best practices," said Igor 
Sechin.

SOURCE: Rosneft