Interview with Jorma Ollila, the Chairman of the Board of Royal Dutch Shell

Question: There was a man called M. King Hubbard employed by Shell. How do you view his intellectual and scientific legacy, i.e. the peak oil theory which proved to be broadly true for the continental United States.

Answer: I think the peak oil theory has a certain explanatory power for individual oil fields. But if you take a global view with all technological opportunities and oil reserves which have not been discovered, the theory’s explanatory power is more limited. I don’t think we have seen the peak point in oil production globally. There is more oil to be discovered through exploration and more oil to be produced due to new technologies.


Q: The International Energy Agency predicted in its most recent World Energy Outlook that the demand for oil in 2030 will be 106 million barrels per day (bpd). Two years ago the United States Energy Information administration predicted that the demand for oil in 2030 will be 118 million bpd. At same the time many analysts predict that the production of crude oil will peak within the next couple of decades around 95 million bpd. This view has been publicly expressed by Mr. Christophe de Margerie, the CEO of the French major oil company Total. What’s your take on this theme? How much oil the world will need in 2030? How much oil it will be able to produce?

A: I have read the speech in which Mr. Margerie expressed his view, but I don’t know its foundation. All I can say is that if we look at the forecasts for both demand and supply, I think most forecasts have not tended to be particularly accurate. What we are clearly seeing now is a situation where technology does influence the supply of oil and the capability to produce it. Advances in technology are continuing. So we haven’t seen the end of potential opportunities.

If we look at the demand side, surprises tend to be more a norm than an exception. What we are seeing now are not only the advances in renewables and the impact they will have, but also the impact of public policy. The subsidies for alternative sources of energy, particularly for biofuels and also other opportunities such as the electric car, will be very defining on what the demand for the alternatives for the hydrocarbons will be. There are also factors relating to public policy in automobile industry. What sort of CAFE requirements will be established in the United States? I think the Congress is debating that.

HS/fi