thank you for joining our team with a brief look at your top stories the u.k. is whole banking sector is under scrutiny as the barclays scandal implicates the elite big questions remain as the investigation into great working continues with the former chief executive failing to provide many answers. violence in syria boils despite the best efforts of peacemakers but it's not just bombs and bullets that threaten people's livelihoods it's a lack of food and soaring prices that's taking its toll on people haven't even taken sides in the conflict. and america's occupy activists get

a hold on philadelphia as they rally against corporate greed and equality and five days of protests dozens swept into custody. next as promised our interview show spotlight discussing whether we're going to run out of affordable energy reserves. i was. playing. in a welcome to spotlight into the show. today my guest on the program. the world oil market has lately been unstable and about the prices have been going

up and down making it. but experts say it's ok for now because what's more important is the long term health they say the planet is running out of easily accessible resources and will soon become way hotter and more expensive to get one of the leading experts in the field is of course the president of the world petroleum council but not the kind he's my guest on this. is one of the world's leading petroleum experts he has more than thirty years of experience in oil exploration and production in layton america west africa and europe and mr burton is spent most of his career with a brazilian national oil company petro brass at various technical and managerial positions since the mid ninety's he's been working closely with the world petroleum council a multinational organisation of presenting the oil and gas industry since nineteen thirty three he has organized the world petroleum congress the next one will be

held in moscow in two thousand and fourteen. let. me welcome to the show thank you so much. thank you thank you first of all. talking talking about the current political situation and the situation with which are very closely connected always do you expect any significant well supply disruption because of the situation in the middle east and syria for example. no. obviously we've seen political instability story and. for the most time we never had any significant disruption now there may be some a diff additional difficulties in the lever in the oil supplies that they will need with the implications on price volatility but i do not expect any. long.

disruption in the all supplies but is there a risk that further rise of the oil prices could plunge the world economy back into recession well actually what we're seeing lately is that oil prices are coming down in that is a consequence of the economic slowdown so as we see the tendency for demand to stabilize or even decline as we've seen in the last few months there is an immediate impact in the way prices are trading and they are seen down war tendency in oil prices having said that in the long term movie we expect that we'll continue seeing volatility but generally speaking of prices will tend to stay strong with hard for the verge of growth in news coming from oil and gas russia is among the nations deeply concerned with declining price of

commodities spotlight's. has more in that. in mid may or prices hovered there were one hundred and ten dollars a barrel and then i met freeport predicted they would double over the next ten years their hot one hundred and turn mungo as good a way to eighty in june really for consumers of the world's most traded commodity but above all for raw material suppliers the russian government hadn't expected the steep decline in oil prices as a base the country's spending on the most optimistic one hundred fifteen dollars per barrel making budget deficit a reality for this year but you know putin has announced a new step in moving the country away from the line so already. you budget rules will be adopted soon under which neither state liabilities nor budgetary expenditure nor long term investment programs will depend on oil prices

excess profits will go to replenish monies the author of the greek term g.m. or knew of goldman sachs says russia can only benefit from lower oil prices as it will finally be forced into diversify in the corner me something much talked about but slow at implementation and it's high time to do that as the morgan stanley analysts predict the commodity bubble is about to explode and the world might not see expensive oil for another twenty years. so do you think that these so-called commodities supercycle has really come to an end and there will be no more expensive oil for the next twenty years or so. let me try to. show we have a big picture on there the answer is sector. the wall there's currently consuming about twenty fifty million barrels of oil equivalent and if you put all the energy

forms together and convert into the equivalent of oil that's what this the concentrates approximately two hundred fifty million barrels of oil equivalent per day though there are two very important drivers to energy consumption first is population growth and we have various projections but they all say that by two thousand and fifty you're probably going to be around nine billion people living on earth the second important driver is the consumption per capita and there is an enormous disparity in the index between developed and developing countries of the velo countries consume on the average fifty verrall spur person or year developing countries are more on the range or are of five to ten and if you take india for example the average consumption in gay's one point four barrels per person per year so as we bring economic development to the bric countries we're

going to see millions of additional consumers come into the market so that is putting tremendous pressure on the man's side so the consequence for that is that oil prices will necessarily continue strong will see volatility but prices will come continue a strong so despite the volatility of the tendency will be plus i mean it will then see all of the blood is ok but will the industrial economies given the tendency to talk now will they be trying to cut their dependency on import of oil and gas what it means that they have to cut this dependence well yes and this is a good thing actually because the other way in portland aspect that we have. to deal with is to consume wisely our resources so that we can continue the livery of

oil and consuming oil for a long term so the industry has been able to find the valuable or oil in areas that are extremely challenging and some of them very expensive so as we see you know the markets you know looking for diversification looking for renewable sources of energy that will longly you know make sure that the oil based industry will continue for a longer time so in the end all benefit producers because we see a long term cycle for their commodity and they'll be relying on exports of oil for a long term and consumers because we're going to see even though. strong oil prices at a level that they can afford and continue developing well following the sanctions against iran which the definitive target or the revenue demand for russian urals may be growing because russian urals are the true samples it's pretty much similar

to the to what we get from iran's uranium crude and therefore it's a good substitute and and can we say that if the situation in the middle east aggravates that russian oil producers may win from this political situation well i don't qualify it as a win. would qualify milhollin say make my money out of one particular situation but that could happen from a number of situations take it for instance natural disasters. when hurricane. katrina struck the gulf of mexico over two million barrels of oil were removed from this supply side so that created that right there a huge volatility pick but that's a short term gain it's actually better for all for consumers and producers that we keep the low and a steady stable price level so that we can have

a budget and invest continue investing that so it's interesting that you say just. to into a more philosophical spirit of business trading oil. trading oil winning is not always making money and making money making more money than there is is no ability to be winning out that that isn't true then goes the winner at the. brings me to another important aspect of our industry which is sustainability in actually sustainability was very high in the agenda of rio plus twenty which was just recently held in rio and we're all talking about sustainability let me define what how we see sustainability in the oil industry. that implies that we need to meet four requirements all of the same time first of

all the industry needs to be profitable because if there is no profitability there will be no capital coming to the industry requirement one second requirement that the wealth that is generated in a producing country in the end also reverse to local society in the form of royalty taxes creational jobs. respect for the local culture engage in like community the third required is that we minimize you know the environmental food and accidents so the target should be zero spiels zero x. that if that's possible i don't know but that's our target as an industry and the force requirement is that ethics and transparency be part of the decision making process and so all of those four requirements are essential to making money in the long term is actually very important to keep the industry sustainable well

we will have to take a short break then goes to remind that we're talking to them not to get down into the president of the world literally in both ways it will be back shortly after we take a break so stay with us don't go because we'll continue this interview in development . wealthy british style. is not on the time. markets why not come to. find out what's really happening to the global economy

with max conjure for a no holds barred look at the global financial headlines tune into kaiser report. there hasn't been anything yet on t.v. . it is to get the maximum political impact. before source material is what helps keep journalism honest we thought. we wanted to present. something else. the. lines. would be soon which brightened if you knew all about song from phones to impression these. means phones totty dot

com. welcome back to spotlight i'm al gore in our in just a reminder that my guest on the show today is now to the president of the world petroleum council. renate do you agree with the international energy agency's forecast that global crew demand should be rising sharply in the coming months and if you do agree we made them happen. well we know further so what is it a political statement or is it an economic economic or gas well using well. i'm not going to make a judgment on was the intent behind the state but our view is that. certainly

we're going to see growth in demand not the short term is a bit more complex because of the. current economic slowdown that we're seeing particularly in europe but but also spreading over a number of places in the world but there is no question that as soon as we see the konami indicators stabilizing and coming back to growth we're going to see again every new increase in demand. no question about the future it's actually about the present but still about the alternative alternative. energy sources when will they be ready to to really replace the traditional energy sources and then only will that ever happen in our lifetime that's a very good question. we have a view that there are renewable sources of energy as all sorts of alternative value

fuels solar wind. are important but they are complementary to fossil fuels. in our view coal natural gas and oil will remand the main source of energy perhaps i can think for around seventy percent of the supply for the next few decades we talk a lot about the peak oil field according to we we reached the maximum on capability of production that we have i don't agree with that i think you know new technologies new ideas are leading us to find oil in places where we never thought would be producing oil until a few years ago i'm so confident that fossil fuels will continue as the key source of energy to supply the wall and then i feel the kate well. my next question please don't say it's a good question because when people say this is

a good question it means they're not going to answer it. well and the question is very serious i want to know is there a price which we should reach to make consumers ready to turn to other energy sources no no i think. what we'll see is that there will be balance in the demand and. supply which will dictate the rise of the right oil price if the price goes up excessively then we're going to see the destruction of the man because everybody is going to turn to alternative sources or will start cutting down on consumption and that may create economic recession on the other hand are if the price is too low there will be lack of investment so over the long term we're

going to see we have volatility but we're going to see an average price that keeps the right balance between supply and demand so that we continue vesting and provided the this area amount of oil that the consumers will be willing to pay for so overall it's basically an economic balance equation you mentioned sustainability you don't talk more sustainable it see the investors or the major oil companies e they usually see that sustained investment in both the short and the long term is critical to avoid potential supply shortages well are there capitals for such investments available on the world financial markets yes there are yes and as long as we meet those four criteria that i'm making going for. the first one being you know a reasonable profitability if we encounter projects that deliver

sufficient return and meet all the other requirements on. safety and environment there will be capital there is a lot of liquidity in the world so there is a lot of capital looking for good projects and i am convinced that we have the good projects in the oil business. in one of your interview sir you mentioned that the world is almost out of easily accessible resources and the exploration of war than gas will only get more difficult which means more expensive so what are the obstacles the petroleum industry will face in the near future yeah there's actually air easy or oil has been found and most of it or good part of it has been produced we now have to look into extremely deep waters or extremely deep frezza of wars or may have to look into remote regions or into areas that could

not have been explored before be dissolved in saudi arabia is finished also in your home resources. and it is cheaper yeah but the price is always the date that by the most recent cost i see so as we have to continue supply and to meet the demand we have to go into you know very deep waters like of rubber seal of shore west africa now east africa gulf of mexico this oil is not cheap to produce so that's the rationale behind that assertion the easy or oil is being found now we need to look for more challenging and more costly oil and that's another reason why we can predict that oil prices the long term continues to well when we speak about these new here is the new areas will need new technologies because because they in

the shoe is exploring new frontiers and they need new machinery new technologies know how so and so forth are these technologies available are they there already are all we still need to invent something new to to think of something new is actually a bit of both. in many areas especially in the water. what is happening is that previous technologies are be adjusted to meet the conditions of these new areas like we go for much higher pressures and temperatures so what the industry is doing is to a bat or just to specify equipment and. blinds pumps to those new conditions so for that we already have the technology is basically you know i just meant that technology to beat the requirements of these other areas now there are other situations where your technology is brand new or

have to be developed and that's why the industry continues we invest our research is interesting to note is that you know the big oil theory has been raised on this curse since in the forty's are in the for this there are already people thinking that we are running out of oil and as time passed with new technologies that we've been able to develop ensure that we continue delivering the all that the world means well in turn trips into turkey these questions because you are again are just going to i mean here you are a scientist in the field so another question there are technologies that help people help companies and countries per along the life of existing wealth was when you say in the forty's people thought that they are exhausted but then the technology comes and it's like revives the field so. is it worthwhile i mean i mean

is it is it there's a payback when we use lots of money to to to to to to revive the field or it's more more adequate for businessmen who also aren't here to do to for find a new place to drill it's actually a combination of both because we see the man growing and the other important aspect to key. the mind is that the existing production tends to decline that's inevitable is just natural because as the reservoirs lose pressure that there is a tendency for the current fields to decline production and in order to compensate for this decline we actually need enhanced the recovery of the existing reservoirs and there you use a certain set of technologies like gas injection water injection number of other things or go for the new discoveries in those challenging areas in the end makes

economic sense to go for goals as long as we have sufficient return and sufficient prices as the leader of the world petroleum come from you me you you you are running a muddy the should be well more responsible the oil producers themselves than the than the capitalist so what i want to ask is about the guarantees when when we talk about drilling in the arctic drilling in the porter's drilling on the shelf can the producers guarantee that this will keep the environment well at least to keep it keep it ok not knowing that damage yeah that's our constant macit and actually that's going to be very high in the agenda of the all petroleum congress that we are preparing and going to hold in moscow in two thousand and fourteen. of the air force that we need to continue putting together to guarantee the integrity of the environment and minimum for brains. there's been enormous progress made by means of

three in the last three decades now unfortunately we do recognise that from time to time accidents like that macondo accept i mean that gulf of mexico you created normal sane back and more most criticism from society cannot we learn a lot from accidents like those and we take those lessons and trying to use those to improve our performance so much so that one will hold a congress like this and we always that make a you know a good part of the program to discuss what we learned and how we should be improved our war operations in moving for the world i hope you are successful in that thank you thank you very much for being so nice and just a reminder that my guest on the show today was there not a better president on the world patrol and that's it for now from all of us here if you want your sense for blood drop to put blood will be back with more first

uncommon fund what's going on in and outside russia until then stay on t.v. and take. thank the good.

are. plenty.