Introduction My first words of appreciation are to the organization of the XVII World Petroleum Congress, for giving me the opportunity to participate in this plenary conference on the role of natural gas as a bridge fuel towards a sustainable future. The World Petroleum Congresses have been, since their beginning, a meeting place for reflection on a high level, where the problems of a sector that is a cornerstone for the normal development of economic activity have been debated in depth and rigorously.
I am also pleased to have been offered the possibility to share this panel with well-known speakers, responsible for other important world energy companies, at a time when the sector is facing an exciting challenge: the attempt to make compatible at the same time respect for the environment and growth, liberalization and supply guarantee, increasing taxes while maintaining low prices, pressure from society and shareholders, and diversification of supplies and competition.
Given the logical brevity of my presentation, I will center on explaining the principal aspects that, in my opinion, make natural gas the key energy product for the 21st century, such as its relative abundance, economic advantages and the lesser impact of its use on the environment, in comparison with other fossil fuels.
Supply-side view Gas natural: a plentiful energy source Historically, the discovery of gas reserves had a low value, since the lack of organized local and international markets, along with the higher costs of transporting Liquefied Natural Gas (LNG), slowed down the economic development of the gas fields.
At the same time, and due to the improvements linked to the development of new exploration techniques, such as seismic 3D, directional drilling, and work in deepwater, proven natural gas reserves have increased gradually, until reaching the same level as oil reserves (close to a billion equivalent barrels), while their average life (calculated as a ratio between reserves and production) has presently attained 62 years. Furthermore, these technological improvements have made it possible to keep reducing production costs.
Thus, gas has become in the last two decades a plentiful energy source, with the added advantage of being less concentrated geographically. We must remember that two-thirds of proven world oil reserves are concentrated in the Middle East, a percentage which is reduced by almost half in the case of natural gas.
The demand-side Gas killed the oil star view In spite of its dominion of the energy market during the twentieth century, oil has experienced the lowest growth among energy products since 1970: as compared to an annual world economic growth of 3.4%, oil consumption has only grown 1.4% per year. So, its total share in primary energy BLOCK 1 - - PLENARIES 61
has been reduced by 10 points during the last thirt