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- H.E. Magzum Mirzagaliyev
Upstream companies know that, over the longer term, the energy transition could significantly depress both demand and price levels for petroleum products. Companies will seek to remain profitable by owning assets that contain the planet’s most valuable barrels and molecules; commonly referred to as advantaged petroleum. Advantaged petroleum assets typically will exhibit low finding and development costs; they should deliver production that is dilutive to a company’s existing portfolio in terms of emissions, carbon intensity, and carbon footprint. The risk profile of these assets and the markets they supply should be seen as manageable and relatively stable. Companies need to stay ahead of change to ensure that their petroleum resources remain advantaged. Will the focus on advantaged petroleum leave some basins and players out of the mix, hastening the decline of older, traditional producing areas? What role might certification play; for example, will the concept of responsibly sourced gas expand globally beyond the US arena?
New development projects and new technologies are driving Eurasian hydrocarbon production to new heights. Will this continue, as these producers see themselves as holders of “advantaged” resources globally? Or, are changes on the horizon, either from administrative decisions to continue to collaborate with OPEC, shifting demand limiting markets for their products, or financial constraints? How are Eurasian companies responding to the challenges of a lower carbon world?