Speaking at the Economic Times Global Townhall, Kumar said these days there is a discussion about the pathways different sources of energy may take over the coming decades.
There is a perception that renewable sources of energy may soon end the oil era.
- However, according to the recent analysis by many specialists in the sevtor, even with an accelerated development of renewable sources, the fossil fuels will continue to play a dominant role in global economy for several decades to come
- I also believe that this is likely to be the scenario
Also, natural gas consumption is projected to witness a bigger rise, at a CAGR of 4.18 percentage points to 143.08 million tonnes by 2040, as opposed to 58.10 million tonnes in 2018.
- Thus, the oil industry is expected to remain important and relevant in the coming years
- No doubt, the oil industry itself will have to be financial institutions, to adopt better environmental, social and governance practices, which is emerging as a key business context
Also, the policies and measures adopted by governments ascross the world towards achieving net zero targets will have a profound impact on future of oil economy, both in relation to its operations as well as demand of its products.
The oil corporations, especially the NOCs, had the mandate to focus on their primary role of exploration and production of oil & gas but the cyclical nature of oil prices poses a heavy business risk on such standalone E&P companies, Kumar said.
- Hence, the less riskier integrated model, with proportionate upstream, refining and marketing assets, is becoming the norm. ONGC Group has also integrated across the Hydrocarbon value chain and now has its presence in upstream, refining and downstream assets almost with 1:1:1 ratio