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Future energy mix demands sustainable investments

Feb 13, 2019
3 min read
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Sustainable investments will dominate the agenda for energy companies as they look at building a balance between increasing energy demand and rising climate change risks, experts said in Egypt on Tuesday.

Maria Moraeus Hanssen, CEO of DEA Group said at the Egypt Petroleum Show (EGYPS) that the changing dynamics in the energy industry mean the company has to continue providing gas in as sustainable a manner as possible.

“While there is a clear issue of climate change due to global use of fossil fuels, there is also a continuously increasing and long-term demand for oil and gas,” Hanssen said, adding that DEA will eventually look at a partnership in renewables as a balance between the two issues.

“This makes sense for us not only on a commercial perspective but also for the energy market and energy transition,” she said.

Meanwhile, Ali Al Jarwan, CEO of Dragon Oil said that operating cost at an engineering level has to come down for the industry to be sustainable. “Engineers have to look carefully at the cost structure - it’s also the same from an investment point of view. You have to focus on front-end engineering cost and then on operational cost.”

Hanssen added that the low cost environment of recent years has been a good lesson for the industry that it can be sustainable at oil prices below US$50 per barrel.

Low oil prices have triggered companies to have plans in place for $40-$60 per barrel price of oil, she added.

“With renewables coming to the market - we will see energy being available in many places in the world. I think we have to be prepared to see oil prices shifting downwards because there is going to be a lot of energy - and think about how are we going to be relevant,” she added.

Nick Boyle, CEO of Lightsource BP - a partnership in solar by BP though a significant but minority stake -  said that while investment in solar panels was expensive in the beginning, the price today is 5 per cent of the original value. Affordable panels, amoritised over many years, means solar energy is available at a competitive price.

With steady and predictable returns from solar energy, many financial investors, especially pension funds are attracted to it.

“The future of electricity will be affected by solar because the amoritised cost of solar panels is zero - panels last longer than the term,” Boyle said.

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