Galp CEO tells Web Summit cheap energy going to cease

  • Lusa
  • 4 November 2022

The oil company CEO said the current energy price is "as much due to underinvestment as it is to the war in Ukraine".

Galp’s chief executive officer (CEO) Andy Brown said on Thursday at a panel at the Lisbon Web Summit that the world is entering a period where “cheap energy is going to cease to exist”.

“I think we are entering a period where cheap energy will cease to exist. There will be massive changes to our consumption habits and how we use energy, and we will have to get used to immense volatility,” Brown said at the panel on ‘Energy in Europe: What’s Next?’

The oil company CEO said the current energy price is “as much due to underinvestment as it is to the war in Ukraine”.

“The price of energy before the war was higher than now, the price of gas at the end of last year was higher than now, so you have to look at that whole spectrum,” Andy Brown said.

According to the manager, one of the reasons for these procedures is that energy-producing companies are being directed to an alternative without investment in oil and gas, but “the alternative is not prepared to dominate”.

Galp’s CEO referred to the United Nations Framework Convention on Climate Change, which estimates that $125 billion of investment is needed by 2050.

“That’s between 3 and 4 billion a year, which is double what we invest today, and if you’re going to invest twice as much, energy is going to cost twice as much,” he told the audience.

One of the solutions is to strengthen the capital of companies so that they can reinvest in these productions – which needs government collaboration.

“What we need to do is, for example, and we have a refinery here [Sines], we have to transform it, and for that, we need to invest, we have to find a way to strengthen the capital to do it. We have to have governments regulating and putting incentives in place so that when prices rise, the money generated is not just taxed and distributed, but allocated to the energy of the future,” he said.

Andy Brown said Galp sees a future with lower carbon dioxide emissions but warned about current consumption habits, which place hydrocarbon-derived products as the axles on which they run.

“We see that the future is going to be decarbonised, we know that we are going to have to find technical solutions, but we recognise that people in Portugal continue to live their lives around fossil fuels, so we cannot abandon that responsibility, we have to be part of that responsibility”, he added.

Andy Brown was also enthusiastic about green hydrogen, believing that “it will bring many solutions”.

About the recent elections in Brazil, won by Lula da Silva, who will replace the outgoing president, Jair Bolsonaro, the company leader did not believe that the policy change would affect his activity.

“In my previous job, I go to Brazil a lot. I met President Dilma [Rousseff], who was also left-wing, we also went through President [Michel] Temer. We’ve had left- and right-wing governments, but Congress is more central”, he said.

Brown left the doors open on his future and says that “it is still undecided”.

“What’s coming up is still undecided. I don’t want to leave the energy sector,” concluded the British manager, adding that it is fundamental to make the right decisions in the coming years.