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US oil moratorium could reduce global supply: Shell CEO

13 September 2010

(AFP) MONTREAL — Prolonging the US government’s freeze on new deepwater oil drilling in the aftermath of the BP spill in the Gulf of Mexico could dent global oil supplies as early as 2015, Royal Dutch Shell said Monday.

US President Barack Obama’s order to block new deepwater drilling after a deadly explosion ripped through a BP-leased rig in April has only had a “rather small” effect on oil supply so far due to Saudi Arabia’s huge oil capacity, chief executive Peter Voser said.

However, he added, “if the moratorium would be prolonged, quite clearly you would start to see impacts on the supply from deep water, most probably (around) the time of 2015-2020 and the world needs to watch that.”

The moratorium is currently in effect through November 30.

After a court ruled against the six-month moratorium, the federal government issued a fresh ban on July 12 due to expire on November 30 to ensure oil companies implement safety measures in the wake of the worst maritime oil spill in history.

But local officials, lawmakers and oil industry workers said the move would cost hundreds of thousands of jobs for a regional economy already battered by the massive spill, which spilled 4.1 million gallons of crude into the water.

And oil firms with extensive operations in the Gulf of Mexico warned of an exodus if the drilling remains suspended.

Speaking at the 21st World Energy Congress in Montreal, which runs through Thursday with the participation of 5,000 energy industry representatives, Voser said natural gas could be a future solution to the reduction in oil supplies and the growing energy needs.

“Natural gas, as the cleanest-burning fossil fuel, will play a prominent role in decades to come,” he said. “It has the potential to alter the energy landscape for the world as a whole.”

Voser said natural gas could satisfy growing energy needs worldwide while maintaining a healthy supply that could feed the market for 250 years.

By 2020, global demand for natural gas is due to grow by 25 percent, before jumping to 50 percent by 2030, according to the Shell chief.

Copyright © 2010 AFP. All rights reserved

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