Long term energy supply at risk due to underfunding oil and gas: Rosneft

London, (Quantum Commodity Intelligence) - The long-term stability of energy supplies is at risk due to "underfinancing and underinvestment" as the major oil companies focus on short term profits from existing assets and companies come under pressure not to invest in oil and gas, the head of the world's second largest oil producer has said.

Speaking at the St Petersburg economic forum, Igor Sechin, CEO of state-owned Rosneft, said on Saturday that the world risked a "very dramatic shortage of oil and gas" in the near future due to a lack of investment in new crude oil and gas supplies.

"The reserves of oil and gas are at a historic minimum and a certain shortage of resources is what we currently see. This trend may become a new norm," Sechin said, who heads Russia's largest oil producing company.

He added that many companies needed to change their "mode of interaction" with the outside world because today investors were focussing too much attention to environmental, social and governance programmes, carbon neutrality and green rebranding ahead of investing in traditional fuels.

Oil majors were focussed on propping up share prices instead, he said, risking an acute resource shortfall starting as early as later this year.

The St Petersburg conference comes two weeks after the IEA said in its inaugural net-zero carbon report that the investments in new oil and gas would need to halt this year in order to meet a UN pledge to limit global warming to 2C above the mid-1800s.

And senior officials at oil and gas companies were meeting just a week after a Dutch provincial court ordered Shell to cut its emissions beyond its own internal targets.

Last week, Russia's deputy prime minster Alexander Novak warned that oil could rise to $200/b without fresh investment.

"This very quick energy transition requires the introduction of renewable sources of energy at an unrealistically high pace," Sechin said.

Russia is a huge net exporter of fossil fuels and Sechin is a close ally of President Putin.

Rosneft produces about 4 million bpd of crude oil, second only to Saudi Aramco.