Royal Dutch Shell CEO Ben van Beurden said on Tuesday that signs of an oil price recovery are emerging, but it will take time for the market to rebalance.
“I see the first mixed signs for a recovery in oil prices,” van Beurden told the Oil & Money conference in London.
“But with US shale oil being more resilient than we originally thought and a lot of oil still in stock, it will take some more time to rebalance demand and supply,” he added.
Global oil prices have fallen for more than a half since last year putting a major pressure on the oil and gas industry.
The drop in oil prices is also having big impacts on international LNG prices and is causing a slowdown in the development of LNG projects with companies even cancelling their projects as they are not sustainable in this price environment.
However, Shell is in the midst of a $70 billion takeover of BG Group which, once completed, will create the largest LNG player in the history of this relatively young industry.
Hague-based Shell now produces more gas than oil and has also been eager in promoting the fuel as a cleaner alternative to coal, which dominates electricity output worldwide.
“Gas is a fossil fuel, yes, but a crucial one for building a low-carbon future,” van Beurden said.
When burnt for power, gas produces around half the CO2 and one-tenth of air pollutants that coal does.
“A switch from coal to gas in power plants improves air quality today and helps deliver a sustainable energy system tomorrow – together with renewables,” he added.
LNG World News Staff