Ladies and gentlemen. Good afternoon. It’s a great pleasure to be here today – in some senses returning to my roots. What I would like to do is to step back and reflect on the challenges the world faces in the matter of energy and what we as an industry might do to meet the challenge.
The 21st century dawned with a great sense of optimism. The Cold War, which had dominated the previous half-century, was over and with its end the spirits of the world were lifted. The battle of political ideas had apparently been won - free markets and democracy triumphed over the centrally planned state. A dynamic new information age offered enhanced freedom and prosperity. The revolution in the biological sciences promised health, beauty and longevity. World trade took off and, in the less developed nations, hundreds of millions of people were joining the world economy for the first time, seizing the chance to lift themselves out of poverty.
There was even the hope that the political will of Kyoto could be translated into actions to mitigate the environmental effects of rapid population and economic growth.
Today, seven years on, that euphoric mood is in danger of swinging the other way, towards insecurity. The rise of militant Islamic fundamentalism represents a new challenge to free markets and democracy. The economic miracles of China and India are giving rise to fears of loss of market share and of status among the older industrialised nations. Climate change has become a source of anxiety to many.
And, perhaps most relevant to this conference, a new spectre has been conjured from all these things. This is the fear of insufficient energy supplies, whether due to the self-interested nationalism of some resource-rich countries, or to oil supplies supposedly passing their peak. For those who succumb to these irrational fears it is all downhill from here and only a sinister Petro-Apocalypse lies ahead.
I am glad to say that I regard much of this gloom and doom as vastly overdone. But we should admit that, in the first decade of the 21st Century, those of us who work in the energy industry are at the very centre of the challenges which the world faces. It is not a comfortable position. Yet we should rise to those challenges wisely, confidently and rationally.
We should remember what our purpose is, and has always been: to ensure the efficient development of the world’s oil and gas resources and, through that, to ensure that the demands of consumers - the people of the world - are met.
And we have a moral duty to act in sustainable manner. We must fulfil our purpose in ways that minimise the environmental impact, not only of our own operations, but of the customers who use our products.
If what we do is clear, then how we do it is equally so. Millions of investors entrust us with their capital, and we combine those financial resources with human ones and then deploy them in a world replete with technical, commercial and political risk.
By working in partnership with resource-rich countries we aim to create wealth for them too by providing the energy for the basic things of life, such as heat, light and mobility. I believe that is a noble cause.
And yet, today, we should realise that many of our customers don’t see it that way. They are sceptical. And they believe, falsely, that the energy industry cannot be relied upon to do the right thing.
It is worth examining some of the origins of this insecurity. Only then can we be clear about what actions are required.
I think there are four sources:
First – the oil price. As the price has quadrupled in the last seven years, so people have come to suspect that there is a global shortage of oil and gas.
In the industry we tend to dismiss that concern since most of us believe strongly that there are very large oil and gas resources remaining in the world. We know, from our own experience and own observations – and I sp
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