Oil and Gas: Threats and Opportunities Amid Crisis in Russian Invasion of Ukraine

Oil and Gas: Threats and Opportunities Amid Crisis in Russian Invasion of Ukraine

Oil and Gas: Threats and Opportunities Amid Crisis in Russian Invasion of Ukraine

What will Argentina do in the face of the energy crisis caused by the Russian invasion of Ukraine?

It is clear that Russia’s invasion of Ukraine will bring about major economic and geopolitical changes in the world, mainly in countries such as the United States, China and members of the European Union.

And, of all the sectors, the energy sector may be the one that is undergoing the most transformation.

There has already been some pressure on oil prices after two years of growth in the global economy, with demand reaching 100 million barrels per day. Great pressure on infrastructure and logistics. Which added to some conflicts in producing countries such as Nigeria, Libya and the United Arab Emirates.

In addition, the high price of natural gas meant that in some cases it was driven by oil derivatives.

The conflict in Ukraine has exacerbated this situation and the price of oil has exceeded $ 120 per barrel. In a world that is interested today – and above all in the European Union – in how to reduce or eliminate its energy dependence on Russia.

Russia is the second largest oil producer in the world today, after the United States.. It produces about 11 million barrels per day, of which 5 to 6 million barrels are exported. About 2.5 million barrels of this go to Europe. Is it possible to replace these 2.5 million barrels within a reasonable time?

This is where the EU is We are seeing accelerated changes to reduce or eliminate the above dependence on Russia, not only for oil but also for natural gas.

The most likely scenario is that gas imported from Russia will be diverted from nuclear energy, non-Russian coal sources, biomass, renewable energy and liquefied natural gas imports to eventually import hydrogen as well.

The oil deficit could eventually be partially offset by OPEC and partly by the United States, with the development of recent discoveries in the medium term.

During this period of transformation, our country is experiencing high prices for natural gas, Partly buffer summer in the Northern Hemisphere; And high oil prices, which have been partly offset by exports as long as they last.

გრამ But also We will have great opportunities in the medium term: to increase our oil exports to compensate for the global deficit, and even to export liquefied natural gas (LNG) and even hydrogen in the long term. Europe will help in the changes that have taken place in this region.

We have huge exploitation resources in Vaka Muerta, to which we can probably add a great discovery. OffshoreAllowing us to be an exporter of crude oil and natural gas.

We also have the opportunity to participate in the extraction of hydrogen by pressing carbon from natural gas and storing it in depleted ores (CCS) called blue hydrogen.

But It will take time, investment and stable market conditions. It is essential that politicians, at least once, know how to recognize these opportunities and take advantage of themCreating the conditions for our highly skilled industry to invest in the full development of our resources.

Gas and oil have a huge value chain that is not limited to wells but also expands across the country, including manufacturers, services, distributors, transporters, construction and engineering, refining manufacturers, marketers, and more. A chain that will inevitably grow as the business grows, with more investment and employment.

Otherwise we will be left with only the consequences of the crisis.

* The author is the President of the Argentine Oil and Gas Institute (IAPG).

Source: La Nacion