 and at about 10.7 million barrels a day in China, which is extremely strong. But the narrative has changed, and I think we should really address this in the great energy race. First and foremost, the talk about the great energy transition is not overblown because we see the cost of solar and wind dropping rapidly, which has implications for geopolitics of energy going forward. And thirdly, most of us are baby boomers in the room today. The baby boomers are considered very spoiled when it comes to climate change and actually digging our heads in the sand and moving too slowly. I think if we're gonna mark the change in Davos 2019 is a recognition by the energy industry itself that it cannot be business as usual. We hosted another CNN Business Roundtable on Wednesday and we spent about 40% of the time on climate change and the companies themselves, the IOCs like Occidental discussing their roadmap. HESP adjoining, which is very involved in the shale, Bakkenfield has its climate change policies, but very importantly, you're not gonna raise money in the market if you don't have those credentials. And as one of our panelists is gonna discuss, we even see pressure from the investment funds in Europe to divest of oil and gas entirely. So there's a lot of push and pull in the industry today. We have an absolute super panel. I'm really glad it all came together. Fatih Birol from the IEA, Kirill Dmitriev from the RDIF, the Russia Direct Investment Fund, Megan O'Sullivan from Harvard and Majid Jaffer of Crescent Petroleum has given them a nice welcome before we get started here. Just for the landscape, because I see a lot of different people from the industry and people from the environment community, I wanna at least allow 15 minutes for some Q and A. I think it'd be superb to do so. I just wanna make sure we have microphones in the room more than one so we can do that, which would be great. I would ask for not statements, but questions to our distinguished panelists. I wanted to bring up a graphic to start our discussion here. And that is the volatility we've seen over the last six months. And it's driven in part because of the geopolitics that have been in the market. And I say that because in the front half of 2018, we had Donald Trump suggesting, we're gonna take Iranian exports down to zero. And that was a narrative in the summer, right? July and August, that continued. And there was a fear of triple digit oil by the end of 2018. Saudi Arabia responded in collaboration with Russia and the other OPEC and non-OPEC players to put more oil on the market in case that actually took place. And lo and behold, we had eight exemptions for Iran. So we don't know how that's gonna play out in 2019. But you see the gyrations partially led by hedge funds that come in and out of the market as well. With the OPEC plus agreement we have now after December, Fatih, do you see a situation where we can have relative stability because we see the inventories on the five-year moving average almost in balance? Or is this just the name of the game that we're stuck with volatility or not? Thank you very much, John. I will refer to last of us a couple of things here. Last of us we said here that the name of the game is volatility. And now this year I can say I expect the volatility the year in front of us may very be even much stronger than last year. At least two reasons for that. Number one, and they are not directly energy related. Number one, geopolitical concerns. Compared to last year, it seems like this year it may be even much stronger, much frequent. This is number one. Number two, global economy. Global economy is slowing down and we do not know yet what will be the implication of the slowdown on the demand side. When we talk about the global economic slowdown one country is much frequently cited which is China. And we all know that the Chinese economic growth may be the slowest in the last three decades and let's do not forget that in the last 10 years China was responsible more than 50% of the global oil demand growth. If Chinese economy slows down this will implication. So these are economic growth and geopolitical uncertainties on one side. Coming back to the energy side. Yes, OPEC plus Russia may well have another go in terms of their production profiles. But once again, the question is A, how this new agreement will look like and B, maybe more importantly, will it be this time effective? Because what we have seen, the effectiveness of those agreements are tested vis-a-vis the increase coming from elsewhere. Last year again, here in this very session you have moderated, we said that for the year 2018 we expect explosive growth of US shale and we have been criticized as outlier. And I said yes, we don't know what will happen but we may revise our numbers. And our explosive growth at that time expectation was 1.5 million dollars per day. What happened? The growth was two million dollars per day. So we revise our numbers, but we revise them upwards. So therefore, let's do not forget, OPEC and Russia agreement is one thing. It is effectiveness is another thing. One more thing, what is changing in the US? I think it's very important. A major bottleneck in the United States, in Permian, was the pipeline capacity. There is a huge pipeline capacity construction now which is going to finish by end of 2019, which will increase the pipeline capacity, bring the oil to the markets by two thirds in one year. And this will increase the ability of US oil industries reaction, capability to intangible markets much faster. So putting all of these things together, geopolitics, economic uncertainties, on one hand OPEC plus Russia, on the other hand US shale becoming much more flexible tells me that a very volatile year is in front of us. Okay, terrific. Excellent. So that's a good overview. I wanna ask the rest of the panelists here to be handle one issue at a time so we can have more of a debate but I appreciate the outlining pillars that you put forward for us. Kareel, I'm gonna come to you right after. I wanna deal with the geopolitics of it because this is front and center as we even speak today but the geopolitics of energy, for example, in Iran, the instability we saw in Iraq with the oil production going up, Venezuela remains extremely under pressure and we've seen the huge drop here. Is it more the geopolitics in your view here and the risk in 2019 than we saw even last year, Megan? I think that this year will have bigger geopolitical impacts on the energy market. There are, of course, impacts that will go in both directions and we also tend to think about geopolitics in the relationship to supply but we also have geopolitics in relationship to demand with the US-China trade relationship and global growth so we have to factor all of those things in but on the whole the points that you made about Venezuela, Venezuela has been a predictable geopolitical impact up until now. It has been dropping supply at a very quick rate but in a constant rate for the last few years. Now we see the possibility for things going in either direction in Venezuela so that's a big question mark on the geopolitical front. I'd also say Iran remains a big question mark and may the US administration will decide whether to extend those waivers or whether to roll them back. So again, we're gonna have the same kinds of uncertainty that we had in November around what is going to happen to Iranian imports. I see no prospect of that being resolved between Iran and the US before that but I would add to that list, Mexico, you have a new president who has caused a lot of concern in the business community about investment, about where his plans are going. You have a Nigerian presidential election and one of the candidates just said a day or two ago that if he is successful, he will re-look at all of the oil contracts. So you do have geopolitical risk throughout really the globe and I would expect that it would continue to play a very significant role in the markets. Curio Dimitri, when you sat on our panel before, again, you were pretty profound because you said I see collaboration between Saudi Arabia and Russia on OPEC Plus. That was three years ago that you singled it out. Mr. Birol is actually putting a question mark on whether this is bulletproof or not. Is it withstand the pressure of rising US production and a president while we're at OPEC meetings either sending the tweets before we get started or right at the end of the meeting? How rock solid is the relationship and then the cohesiveness of all the producers in the OPEC Plus declaration? Thank you, John. I think we have to look a little bit back and remember that four years ago nobody believed in Russian-Saudi cooperation. There was actually a title of an article. I remember it said, Russian-Saudi Oil Cooperation is a hogwash. And then we started this cooperation which became truly historic. And it's not only about the first original agreement to cut 1.8 million barrels. We then extended this agreement for six months, for nine months, for nine months. We then agreed to increase by one million barrels. We then agreed to have another cut of 1.2 million barrels. So we really have a very well-functioning mechanism to adjust supply and demand. Throughout two and a half years, this agreement allowed to reduce supply by 990 million barrels. And we had a really horrible situation in the industry three years ago. Oil prices were 27. And that led to under-investment of around $1 trillion over two and a half years of low oil prices. So really, we believe that this deal is good for consumers and producers. Compliance has been exceptionally strong. It was 106 percent in 2017. It was 143 percent in 2018. That's a little bit misleading, as you know, because we've had a crisis in Iran. But still, even if you forget about those countries, the compliance of Saudi Arabia and Russia have been excellent, 100 percent, et cetera. And then, of course, Shell. Now, to really try to fight Shell, if somebody wanted to fight Shell, you need to have oil prices below 40. And oil prices below 40 are not good for Russian economy, not good for Saudi economy. Frankly, not good for investments in the industry. So it's not practical. I think we believe in win-win solutions. We are impressed with Shell growth in the US. And US is doing quite well on that. And it was good for them. So Russia really views oil prices as a $60 to $70 range that we see as very good for investment, as very good for stability. And I think there is no question that the agreement between OPEC and non-OPEC will continue, and that's a very positive balance in force. And quickly about China. So China oil demand was growing 4.3 percent over the last three years. This year, many people forecast growth of 3.5 percent. So yes, it's a slowdown versus previous years, but it's still good growth. And yes, Venezuela, of course, dropped down 560,000 barrels per day last year. So that's a very significant drop. Great. I want to get Majeed Jaffron. I think I'm going to take a different approach, whether you're Majeed. If we can bring up the graphic on US shell, because everybody brought up the surge in US production. This is the overall number, right? Not including just the tight production. But look at from 2000 and the dip that we saw. But then that surge over the last two and a half years, in particular, Fatih addressed it in this rise to 11.7 million barrels a day to close out 2018. As an investor, Majeed, how do you see this? Do you feel, as Kareel was suggesting here, you have to fight US shale? And it's quite. We're not going to fight you. You're not going to fight. No, I'm asking him. Does he feel like he can go in the market, make an investment in Iraq, which he's looking at today, beyond the Kurdish region, and say, I feel comfortable that we can live in a $60 to $70 barrel oil world where my investment is worth putting skin in the game at this stage? What do you say, Majeed? So first of all, credit to CNN and to you personally, John, for keeping this important topic front and center. There's actually not enough coverage, I think, in mainstream media. And the whole energy transition debate is something that touches us all. And energy is a lifeblood of the global economy. I think the graph shows that the vast majority of demand growth in oil has been met by US shale over the last four or five years. And there has been chronic underinvestment in the conventional in the rest of the world, including in the Middle East. It's been flat or actually declining. As the private sector, we don't see echoing the same message from government. We don't see US shale as a threat at all. In fact, I think it's been very positive for the industry overhaul. It's debunked the myth of peak oil supply. And what's interesting in terms of the energy transition, that revolution that's happened in the US has been one of the biggest positive impacts by natural gas displacing coal had huge decline in US carbon emissions. Looking at the Middle East, we have half the world's oil and gas, only a third of its oil production, a sixth of its gas production. We're punching way below our weight. And we have the lowest costs. And we have a lot of geopolitical issues. We're certainly bullish and going to be investing in Iraq and elsewhere. I think this price range we're in is conducive to investment, certainly in the Middle East. And does the OPEC Plus agreement provide that stability as almost a shock absorber for Crescent Petroleum? I think it does. I think perhaps worldwide to see sustained investment in the long cycle conventional, a range of more like 70 to 90 might be better. But from our point of view... I wouldn't be surprised if you got a tweet right now asking what the heck you're saying. From our point of view in the Middle East, I think it's good. I think a lot of the volatility we've seen also, one point that wasn't touched upon, there's not much spare capacity in the system anymore. And regardless of the tweets and their impact, when that happens, you see volatility. And so I agree with Fatih Bey that you're going to see a lot of that perhaps in the next few weeks and months. Okay, I want to cover a couple of things that came up from all four of you. Peak oil was a discussion five years ago. And now it's peak demand because of what I said at the beginning of our opening remarks here about the energy transition. You've talked about natural gas in your presentation at the OPEC seminar, which was superb in terms of understanding the cost of solar's going down, the cost of wind is going down. When does peak demand hit? And is it around 110 to 120 million barrels a day, which is not bad by the way, in the Middle East probably will benefit and so will Russia because there are low cost players in the market. But when does peak demand hit Fatih if you can see what's in your crystal ball of the IEA? Of course, Joe. But if I may just briefly something, there's a confusion of two concepts, US shale growing and which will grow. And I should tell you we have not seen the full impact of shale yet. It is just coming. This is just to say that. But a lot of people think it's in three or four years that just cheaters out. It is just the first wave is finished, the second wave is on its way, both oil and gas. But now I want to say something. This is good, this happening, but this doesn't mean that Middle East is becoming irrelevant. Because Middle East, when you look at the last several years, Middle East exports did increase. Why? Very simple. Most of the US shale oil is used at home for domestic purposes. And Middle East, we need Middle East oil. US will still increase their production, but both of it is at home and the Saudi Arabia. And I have great, great hopes for Iraq. Oil, gas and economic growth is a wonderful country. There's a wonderful new government there. And I have really high hopes from Iraq. So the world needs Middle East, Middle East oil for many years to come in order to feed the Asian and other countries growth. So put this one aside. On demand. You are right, since 2014 here, in Davos it started, are we going to see oil demand peak and oil demand will go down? There is a very strong discussion. Now, I am a numbers man. I don't give in too many numbers, but at least two numbers I want to give. One of them is the following. 2014, as this demand peak is coming, discussion started. And since that time, global oil demand increased more than six million dollars per day. And the share of oil in the total energy also increased. Even gas, coal, uranium and so on. So this is one thing. Second number I want to give. Electric cars. Alamot, everybody talks about electric cars. This is the end of the world, end of the oil era. Now, electric cars are growing. This is completely true. And it is going to grow lots of investments there. But I want to tell you the following. We have, as we speak now, January 2019, there are five million electric cars in the cities of the world. Five million. Say, record number. Many people couldn't believe. Five million. What is the impact of these five million electric cars in the world to the oil demand? We expect for this year, global oil demand to increase about 1.4 million dollars per day. So it takes it above 100 million, right? No, 1.4 million dollars per day of electric, 1.4 million, the total oil demand growth. The five million electric cars means only 50,000 barrels. So 50,000 barrels, five million cars, vis-a-vis 1.4 million barrels per day of growth. Because the oil demand growth is not driven by cars. It is driven by trucks, petrochemical industry mainly, and aviation. Asia just started to fly. There's a big gap between the Asia and the Europe and the North America. So I don't see, with the current constellation, I don't see any time a peak oil demand in the next 10, 15 years, unless there is, of course, economic crisis, financial crisis, other things altogether. There won't be innovation that creates that? Innovation is happening. Innovation happens to slowing down of the oil demand growth. But the peak and decline of oil demand growth, I don't see happening sometime very soon. The innovation... Let's get this on the record. You said 10 to 15 years. So within 20 years, you're suggesting, and I'm reading between the lines here, that peak demand, it could be with us then, right? By 2040. I think in the next 15 years, I don't expect the oil demand peak and decline. As a result of the market forces, there may be other things coming in the picture. There may be heat subsidy and that, but with the current economic growth rates, with the current innovation pace of the innovation, we will see oil demand growth slowing down because of the new technologies, electric cars, efficiency of using different technologies. It will slow down, but to expect a peak of oil demand and decline within the 15 years is not something I am expecting. Okay, I'm going to ask everybody to be really quick because I've got to cover a lot of subjects here from this point, particularly you. I think it's great to lay out this out, but I need you to be really direct. What are you planning for when it comes to peak demand than Korea and Russia? Well, first of all, we see that 1.5 million was the gross barrels per day last year. Many people including EA forecast 1.5 million gross in demand for this year, but a very important figure I wanted to give. So the share of traditional energy sources was 88% in 1990, and it's forecasted to be 83% by 2020. So a decline of only 5% in 30 years. So first of all, we see this. You're a career, you're suggesting that innovation stops. This is why I wanted to have this debate. So are you planning that you can't look at the last 20 or 30 years, we got to look at the next 20. I mean, look at your smartphone or what it's done to your life. You have to think that technology is going to get into energy pretty fast. And I'm getting there because I believe there is a major demand for petrochemicals, and petrochemicals is the next wave of using oil. And if you see petrochemical industry in the Saudi Arabia, it's around 150 billion market cap. In Russia, it's only 30 billion market cap. And we believe that there is a major demand for petrochemical products, and you need plastic, you need plastic in electric cars. So frankly, we don't believe peak demand come in any time soon. Okay, I'm gonna get Majid's thoughts on it, and then Megan to round out the geopolitical implications of potential peak demand in 20 years. How do you see it, Majid? So I echo that we need to make a differentiation between transportation and the power generation. There's two separate things. And petrochemicals, absolutely. The smartphones, the flooring here, at least the color of it, the screens people are watching this on. These are all oil products, but we do a bad job in our industry of getting that message across. People associate it with gasoline in their tank, and it's a lot more than that. But gas, I think, is going to continue growing, and we are actually doing more gas than oil now. I'm glad you brought it up. Is it a transition fuel, or as some have said to me, you've got it wrong, John, when you cover this thing. It is the fuel for electrification. So I think it is a peer fuel and a complementary fuel, and a necessary one for renewables, because renewables is great and the cost is coming down, but you have the availability factor, you have the storage issue, so you need gas as the base load. And the UAE, where we're headquartered, has put their energy strategy for 2050 to be almost equal, 40% gas and 40% renewables. So actually, it is, I wouldn't say transition, I would say it is a necessary complement to renewables in the energy transition. Megan, if I look at the global map today, and you see those with the blessing of proven reserves, whether it's UAE and Saudi Arabia, which are pushing diversification a big way, Iraq, as Fatih correctly suggested, it's got a new government and they want to open up and diversify their investment going forward. But I look at Iraq with its ample reserves, you look at Venezuela with its record reserves, you look at Iran with its oil and gas reserves, Libya, Syria has some reserves. What are the political implications of the transition that we're talking about with renewables and the states that are not as nimble as a Russia or the United States or Saudi Arabia or the UAE? What happens to those states in your view? Well, I think without a doubt, if we're talking about peak oil demand, even if it is 20 years out, as Fatih was suggesting, that's going to have major implications for every producer because it will mean a lower oil price and lower revenues. But not all producers, as you're suggesting, are going to be equally well positioned to manage it. So the countries that are going to be best positioned are not just low-cost producers, as many that you mentioned, but they're the countries that have the strongest institutions and the strongest governments that are able to attract investment when it is more and more limited, that are able to plan, able to diversify their economies, able to shift from demand for crude oil to demand for petrochemicals. All of those things really rely on the strength of institutions. So think about how the price collapse of 2014 affected Venezuela versus affected many countries in the Gulf. But one thing I would say about the geopolitics of peak oil demand is that even if it's not happening today, the psychology is influencing events today. So we have a lot of disagreements, and I would say many misunderstandings about the centrality of oil and gas to the global economy for the next 10, 15, 20 years, lots of misunderstandings. And a lot of that psychology is affecting investment patterns today. It is making it harder for companies to raise money. It is pushing investment into short cycle investment rather than, as we talked about, long cycle investment that the world will need. So it's already having a big influence on what's going on in markets and the energy sector even if it isn't a reality and we don't expect it to be a reality for some time. Okay, very good. In the next three minutes, I want to do a quick round robin on Venezuela. I'm going to ask you to be quicker, please, on this. And I want to get the three of you, Fanti, Kareel, and Megan on this, in particular in the last Majid at the end of it. First and foremost, I mean, we're at the tipping point, it seems, like, in Venezuela. From the IEA standpoint, have you ever seen something like this in terms of the collapse of output over the last two years in Venezuela? And is it literally economic mismanagement at its finest over the last two years? I can tell you, it is the biggest drop in the history of oil of a sizable producer. What happened? So in the beginning of 2001, 2002, it was more than 3 million barrels per day, the air production, and now barely over one million barrels per day, 1.1. So a huge drop with several consequences. Megan O'Sullivan, you look at geopolitics at Harvard University. This is the nexus of geopolitics and mismanagement of an economy, is it not? It certainly is, and what really will matter is how, assuming there is some kind of transition in the offing, how that unfolds, if we look around the world and we look at where there have been revolutions in other places, if this turns out to be a revolution, it is very rare for a country to bring capacity back online very soon. So think about Libya after 1969. Think about the Iranian revolutions. The Iranians have never brought their oil production even close to where it was before 1979. Think about Iraq after 2003, even after the collapse of the Soviet Union. So there's always quite a long time lag, but if this turns out to be something that is better cooked than in other revolutions, that there is more of a transition process, that there is more international support, then we could actually see that this could affect many of the parameters that we've spoken about on this panel, including potentially, I would say, the OPEC Russia cooperation. You are a specialist in geopolitics. Is this the tipping point from what you can see? Everybody's been sharing the pictures and the video that we see from Karakas. I think the real variable that everyone is watching is the military. And just in the last several hours, the military has said it is going to stand by Maduro. And, but I don't think this is the end of the story. This is certainly, if it's not the tipping point, it is the moment of greatest pressure that Maduro has been under. And I do not see a, even a medium term survival for him. So I would say, I would put, if I was asked to make a bet one way or the other, I would say this is a moment, an inflection point for Venezuela. It's hard to predict exactly what's going to unfold, but it is hard to imagine that this is not going to be a significant moment. Again, a lot depends on the military and whether or not you're going to see the US and other countries increase economic pressure, try to provide incentives to the military in terms of amnesty and other things so that they leave support for Maduro. China has put in about $50 billion over 10 years. Russia has dedicated $17 billion going back a few years ago at the end of 2018, perhaps a pledge of another $5 billion. The Russia Direct Investment Fund is not the player in Venezuela, but the Russian government overall. Do you put more money at stake here, Kuryodimitryev, in the situation that Maduro's in? Well, first of all, we see a slowdown of the slowdown in Venezuela. So the reduction of production was 300,000 barrels in 2017, zenith per day, zenith accelerated to 560 per day in 2018, and decline is expected to be by IHS of only 100,000 barrels per day the next year. The situation is definitely very difficult. This is not just an investment for Russia. Lots of it is basically money in exchange for future oil supplies, et cetera, so there are different arrangements like this. But I think we'll see how the situation plays out. This has to be a decision by Venezuelan people. We see a major frenzy of governments trying to really impact Venezuela transition, including through Twitter, including through saying, this guy is the president and in official position of Russia, Venezuelan people need to decide on their own. But definitely economic situation in Venezuela is a very difficult one. A very direct question here. We've already put $17 billion at play to help Maduro get through. Is Russia at this stage willing to put more money in, or do you hold back and see how this all plays out? John, I'm not authorized to speak on this. You can't speak on this. You speak about everything. Well, that's a question to our leadership, to Minister Novak, who, by the way, supplied lots of the great numbers I'm using here. So this is something I cannot really comment myself on. So to be clear, because you're very, very well connected within Russia, no doubt about it, Russia's not committing more funds at this stage because of the situation we see. That's a fair thing for me to ask you or not. Well, I would say there was a meeting recently between President Putin and Mr. Maduro, and there were new projects discussed, new possible investments were discussed. That was about once ago. So we'll see how that has been implemented over the next six months or so. You think it's a strategic partner still, though, Venezuela, for Russia? Well, I think that that is a position of the Russian government. Majid, how do you see this playing out in Russia? I mean, you follow the global energy market. You have to be watching in wonder, seeing the collapse that we've discussed here on the panel. So from the global energy markets point of view, geopolitical instability and oil are strongly correlated, and that's not a coincidence. And we see it every year. Some countries go up, some countries go down. There are Libya, Sudan, Iraq, some surprise in a bad way, some surprise in a good way. But that's quite a static perspective. My bigger concern, frankly, from the industry is looking at the trends. I mean, Fatah Bey talked about one and a half million or 1.3, 1.4 additional. But what he didn't mention is we have a decline of three, four million as well, which means you need to add every year a new Iraq or a new Saudi every two years. And there's a deficiency of investment of $100 to $200 billion in the upstream worldwide for the last five years or so. And if that continues, we could well be facing supply issues five years from now. Great, I wanna spend some time on climate change. So I talked in my opening remarks about the profound shift in the discussion, even at the governor's meeting with different sources that were in there just speaking to me on background, saying that it was dominating the narrative here. Is it critical that the industry comes together and says this is our plan? We have been working on it. We haven't been sitting idle, but it has to be credible because the investment dollar is not gonna go into an industry that looks to be behind the curve with so much pressure. Do you agree with my premise? Almost, I should say. Climate is also very difficult, not as difficult as Venezuela, I should tell you, but also a very difficult subject. Now, first of where we are, John, now we have the UN report recently, United Nations. We need to reduce the emissions as soon as possible and go to 1.5 degrees. This report came and on the two days later, we had to announce the 2018 emissions did increase once again and record the historical highs. So there is a growing disconnect between the reports, speeches, targets and what is happening in the real life. The targets are getting deeper and deeper, asking for deeper cuts and reductions. But on the other hand, in the real life, emissions are increasing higher and higher. And it will be, therefore, becoming more and more difficult and more and more costly to fix the problem. An energy sector is at the heart of this climate change problem because more than two-thirds of the emissions causing climate change come from the energy sector only. So what do we have to do? We have to make sure that the fossil energy sources, oil, gas and coal, need to be used, produced in a sustainable way. And we have to make a big push for the clean energy technologies. Wind solar, they are becoming cheaper and cheaper and being much more competitive to many others. Energy efficiency, a very critical topic. And I believe carbon capture utilization, a critical technology. And my Russian colleague, Mashen, the share of fossil fuels are very high. Carbon capture and utilization is a good marriage between our climate course and the fossil fuels. This is very important. And in my view, nuclear technology still has a role to play to reduce the emissions. So unfortunately, I should say, in the climate change debate, everybody has his or her own favorite. Some people like solar, some people like wind, some others like nuclear, some others like CCS, carbon capture. But given the order of magnitude of the challenge, I believe we don't have the luxury to pick up one of these technologies, we need all of them. So lots of tweets, this guy is for solar, this is for nuclear. We do not have the luxury to pick up our favorites. We need all the clean energy technologies. If we are really serious to fight the climate change and for the oil industry, for the gas industry, they can not escape from the responsibility of fighting against climate change. So if you hear the term here in Davos as I go, John, wake up, there's a lot of greenwashing going on here. We put our brand on it and we're changing things. We talk about it, but we're behind the curve. Is that a, Megan, is that a fair comment in your view that before it was greenwashing, it was all branding exercise, and now they're waking up to the reality that the investment won't come in, the millennials are demanding absolute change in thinking. Well, I think there's a very big disconnect here and the question is how will it get resolved and in what timeframe will it get resolved? So I see on the one hand, I see oil and gas companies really grappling with this question, but really hang on to the idea that oil and gas are going to be relevant for a long time. And that's true, but that doesn't absolve them from the need to adapt their strategies because even if oil and gas are still very big parts of the energy mix, there'll be enough that has changed that their current strategies won't be appropriate. On the other side, I hear a lot of, as I mentioned, misunderstanding about the role of oil and gas going forward and people calling, let's not talk about two degrees, let's only talk about 1.5. I think that matters in terms of rhetoric, but we need to look at the facts and where we are and talk about how we are going to meet those huge energy gaps if in fact we take the steps that would get us to 1.5, which would have huge implications for fossil fuel industries. On the geopolitics, this energy transition is gonna be huge. Think about how much geopolitical reordering happened just on account of the US shale boom. And imagine a complete change in the global energy mix, how much that's going to impact overall political relationships, how much it's going to change the nature of the threats, the possibility for alleviating energy poverty and the politics of climate change on the other hand. So there's gonna be good impacts on the geopolitics side, but there's also going to be negative geopolitics that come from a big switch to a more sustainable energy mix as well. And I think that's something that people are still resisting acknowledging as well. It's a great point. Kareel Dimitriev, as a Russia Direct Investment Fund, you're a savvy investor. A lot of it's geopolitical investment because you have partnerships that are very keen and important to Russia's strategic nature and planning with UAE, particularly with Saudi Arabia as of late. But are you looking beyond oil and gas when it comes to energy? Are you looking at the renewable sector and how Russia prepares to have technology transferred to assist its partners in the renewable transition or the energy transition? Sure, we are quite excited about renewable technologies. We believe that major reduction of cost of solar, of wind, something that's very significant. And we're actually going to invest in several projects in Russia related to wind. By the way, jointly with Rosatom, which is our nuclear key companies that produce nuclear plants. So this is definitely a factor. We're excited. We're also doing small hydro and lots of other renewable energy approaches. But I agree with what was said that there has to be a mix. In particular, we saw, for example, Germany originally being very excited about renewables and making a big bet that frankly, you know, wasn't very balanced. And we, for example, view that gas is actually also quite ecologically clean. And even I'll say is sort of a quite controversial thing, but nuclear power of the last generation also reduces, obviously, emissions. And Rosatom has some new technologies that enables it to be much more efficient and basically not prone to any incidents. So I think there has to be a technology mix. Russia is going to increase its share of renewables but definitely in a balanced manner. Good. You're making a huge gas bet with the Nord Stream and adding pipelines, you're going into Northern Germany. Donald Trump didn't like it because he thinks the LNG from America can compete, clearly not on price. But that's the big bet in Russia for the next four or five decades, right? It's the gas. Yes, and we feel that US gas is about 40% more expensive if it's delivered to Europe. So frankly, the tax on Nord Stream 2, which is supported by Germany, many European nations, is an example of really unfair competition. And, you know, we have to not necessarily compare to Huawei's story, but I think there is some dimension not to be covered here of, you know, unfair using sanctions and unfair way for competitive reasons. Excellent. Majeed, Crescent Petroleum, are you thinking out of the box? Your company is a conglomerate, a very respected one in the UAE. How do you handle the energy transition in terms of your investments beyond the gas investments you've been making strategically? So first of all, I am personally very concerned about the climate change issue. I'm a father, I'm a resident of this planet, and I don't know another oil and gas CEO who doesn't share that view. But I think we don't do a good enough job of getting our message across. You said that, you know, it's amazing. On the panel we had before, you said that three years ago, and even the OPEC Secretary General sat on the panel two days ago, and says we need to communicate better, and your generation is communicating it, but the rest of the industry is only waking up to that challenge, I think. So the industry's been defending our process and how we produce oil and gas and reducing emissions, but that's not enough. We need to defend our product. I mean, we're now being maligned like tobacco, and it's if you just, you know, tobacco companies saying our cigarette factories are clean inside, that's not enough. There's a lot of misconception, as Megan said. If you ask the man in the street who's had low falling emissions in the last few years, the US or Germany? Most of them would probably say Germany. It's the other way around. Germany's has been rising because they tried to ignore oil and gas, and the US, thanks to the gas revolution, has actually seen it falling. Just to give you one example, our project in the Kurdistan region of Iraq where you visited some years ago, just completed 10 years of production, we got a global auditing firm to look at the impact of that natural gas production, displacing liquid fuels for power. It led to 30 million tons of CO2 savings, which is worth $9 billion. And over the next 10 years, it'll lead to another 80 million tons of savings. So oil and gas is a necessary and vital part of the solution. Now, if you look to the developing world, absolutely it's all about Asia. Asia's adding a new coal-fired plant every week. And even though China and India last year really woke up to the issue of clean air, which drives them even more politically than climate change because of cities like Delhi and Beijing having terrible smog, that is really where the demand growth is coming from. And if that is not addressed, we can't just lump all fossil fuels together. There's a big difference between gas and coal, as Krill said. Great. I'm going to have Fatih comment on that before I want to get the microphones. Do we have any questions from the floor? Okay, we have one here in the front row and one on the fourth row. We can get the second mic to the woman in the pink. Fatih, give us your analysis. I just wanted to mention you are right, John, to put the spotlights on the oil and gas industry. It's a huge industry in terms of climate change. Now, this industry has to underline, has to innovate itself to make its production processes much more sustainable, reducing the methane emissions, CCVS using renewable energy for the operations and so on. But while they are not innocent, the biggest problem today is coal. And I tell you what the problem is. We have today 2,000 gigawatts of coal plants in Asia. And these coal plants providing electricity to low income level people and giving impetus to the economic growth of those countries. Now, in Europe, in United States, there are also coal plants and some of them are shutting down, but they are, John, 41 years old, their age. A coal plant retires around 50 years old. They are coming to end of their economic lifetime anyways. But this 2,000 gigawatts, huge single most important global CO2 emitter sector, is only 11 years old. They have 40 more years to run and return the money to the investors. And they belong to mainly poor emerging countries. How are we going to tell them? We decided in Davos, shut it down because of the global CO2 emissions. This will be double standards. Well, this is a great point. So shouldn't the investment community, IMF World Bank, Asian Infrastructure Investment Bank, be focusing on that and saying, this is the problem. Single, more than 30% of the emissions come from one single source. And it is growing every year. Instead of looking at this issue, when you open the newspapers, it is the sport glasses and oil and gas. I don't say that they are innocent, but the main problem is not that. If we don't focus on the ball, we cannot win the game. So therefore, it is very important in addition to improving oil and gas operation processes for climate change, we have to look at the coal. How we can look for early retirements of those plants without jeopardizing the economic development processes of those countries. This is very important for me that India, China, Indonesia, those countries still enjoy economic growth and have the electricity. Therefore, this is, I think, one of the blind spots of the climate change debate. Just focusing on oil and gas. This is very important, but do not forget the coal. Coal in Asia and how we are going to fix this very young fleet of 11 years old. I think I've been misled by my president then. I thought he was a big supporter of coal. Was he? You're saying something quite different here. The Asian coal is a major problem in the United States. The coal plants are, as I said, 41, 42 years old. In Europe, it is 42 years old. They are coming to the end of their lifetime already. And to retire them earlier two or three years is not a big deal. But in Asia, it's a huge, huge, huge issue. And the one tonne of CO2 going to atmosphere from Munich or from Detroit or from Shanghai, it has the same impact on all of us. CO2 doesn't have a passport. Yeah, it's a great conversation. OK, let's take a question here and then a question from the fourth row. I'll just ask you to be direct and thank you very much. This was great. You have 10 minutes, so this is excellent. Thanks. So Patrick Coleman would have done a guess. Question for Fati, can you give us an idea if we were to convert the entire vehicle fleet to electric vehicles tomorrow, what would be the impact in terms of climate change? How much and how far would it move from the four degrees? Great question. And what would be that impact if you were to replace all of the coal-fired power generation tomorrow? Not possible, of course, but just as a mind game. OK, just a second. Before you answer, you can hand the microphone to the gentleman on the left, but we'll go to the woman in the fourth row afterwards. Fati? Want to get you some more water? No, it's fine. Thank you. Now, if there are more tough questions, I may need more water, so that would be fine. So now, it's a very important question. Again, when you look at the newspapers today and when you look at the television channels, electric cars are presented as one of the main solutions to address the climate change. Now, this is definitely a very important electric cars. They will grow as an energy agency. We want to see them growing. However, it is again wrong that the electric cars can alone or be a main solution to the climate problem, just one number. Cars, all the cars of the world today, we have 1 billion cars in the world today, they are responsible only 8% of the global emissions. 8%, 92% of the emissions come somewhere else. But if you read the newspapers, 90% of the emissions, the climate-related issues are related to cars. They are only responsible for it, but it doesn't mean that we have to increase the electric cars because it is good for, especially for local pollution in the cities. Sorry, it's a complex question. I need you to step on your answer there. And with the current power generation mix in the world we have today, if today 5,000,000 electric cars would go to 300,000,000 electric cars, the impact on the global CO2 emissions, net impact, will be less than 1%. That's it. So you're suggesting back again to the coal is a good target? No, we have to do two things. We have to decarbonize the transportation system, but make the electricity generation much more cleaner. Great. The question from the fourth row, please. Very quickly. Thank you, John. Thanks. So my name is Yulya Khazagaiwa from Russian news agency. I would like to come back to Venezuela issue. Dr. Biral previously said that Venezuela faced. Sorry, I didn't understand. Which issue? You said which issue? Venezuela. Venezuela. Yeah, thank you. Venezuela crisis. So Dr. Biral said that Venezuela faced the hugest drop in oil production in recent times due to economical crisis. So the question is, which consequences do you expect from current political crisis in Venezuela for oil market? So do you think that how this would affect on oil prices in upcoming month? Thank you. Does it really provide a shock? Or can additional supplies provide a buffer? It depends on how the things will develop in Venezuela. Venezuela today supplies slightly more than 1 million per day. And we will see how the things will develop. Venezuela is a great country with huge oil resources. I hope that the solutions are found in a peaceful way that Venezuela goes back to old days to provide oil to the rest of the world and income to its citizens. I looked at the numbers last night because I was covering it on CNN. It was 87% poverty rate, which has gone up like a vertical line. It's absolutely extraordinary. Question here. And then can we get the question to the gentleman in the front row, please? About the other microphone? Thank you very much. Perfect. Thank you. David Kim, the chair of the World Energy Council. My question for Mr. Biral is that many people say that the only pragmatic solution for the climate change You hold it a little bit closer? The only pragmatic solution for climate change in the long run, or even in the short run, might be the nuclear power. And this assertion is politically incorrect for many countries. But even Japan and Taiwan and some many countries are reverting their policies to go back to nuclear power. What's your prospect for nuclear renaissance in the future? Great. Thanks for the question. Good to see you. I'm glad you attended the event. What happens to nuclear investment? Then you said it's better on the emission side. I'm going to get Megan's views on the geopolitical thought of investing in nuclear, after what Germany did. To be honest with you, as much as I personally believe we need nuclear as a key part of the solution to a climate change, the appetite today is not very strong. I see a lot of nuclear power coming from China, Russia, India efforts there. But the problem in the Western world is there is not even permission to extend the lifetime of the existing nuclear capacity. One very interesting thing, John, if the, you know, since decades, US has been the number one nuclear power of the world in terms of capacity. If the US doesn't change its policies less than 10 years of time, China will overtake United States as the number one, world's number one nuclear power capacity country. It is a big change in terms of energy and also, I believe, in terms of the other implications. Before I go to Megan, you're fantastic at nuclear technology. And I think, have I mistaken in suggesting China as your partner? Yeah, and we actually not only have a nuclear technology in Russia, we're exporting quite a bit of nuclear technology. So we're building a plant in India right now. There is also going to be a plant that actually just opened in Turkey. So we're actually expanding our nuclear technology to other countries. And our company, Rosatom, has the next generation reactor, which we believe is actually proof to any sort of incidents. And I think this is something to look into the next generation nuclear as a way to solve the carbon footprint and really something that I think is quite safe. Good. Very quickly, Kirill, when you sit down and talk to your partners, is that part of your bouquet and say, look, we've got this nuclear technology. We think it's good for the climate change. Let's discuss that partnership. It's not just about oil and gas, I'm sure. Well, I would say it's part of the Russian approach. And Rosatom, which is our nuclear company, is responsible for this. And they're doing an excellent job in building those partnerships in different countries. We'd love to partner also with the Middle East on this. And Rosatom is doing this. OK. Megan, what are the geopolitical implications of this? Many in the millennial generation, the shapers that we have here at the World Economic Forum, constantly say, we want to go towards renewables. So if a government, like Russia, goes in and says we have that technology and they decide to go in that direction, what are the implications of it? Sure. Well, in the United States, you really have nuclear struggling for many reasons. I would say maybe the first reason it's struggling in the US is because of cost, not geopolitics, not political pressure. Just the natural gas, the cheap and abundant natural gas in the United States is really squeezing that industry. However, advocates of that industry are making the case on geopolitical grounds as well, simply saying, as was suggested, that countries around the world, it may be that developed economies are moving away from nuclear power and are either moving towards gas or renewables, which of course are not a substitute for nuclear at this point because of the baseload power question. But in the developing world, a lot of countries, the Middle East and elsewhere, looking to enhance their capability there, and it used to be that the United States would be a very obvious partner. But as was just suggested, there's a number of other countries that are being a lot more aggressive, and there's just not enough investment in the US going in to this industry to maintain that particular strategic asset unless there are policy changes and maybe energy mix changes as well. Terrific. Final question from the floor. Thanks. Good morning. I'm the party chairman of the National Gas Company in India. We are pushing a lot to expand the gas infrastructure and pushing gas into the energy basket. But the question I want to raise to Mr. Fatih when we talk about climate change, and you mentioned the coal is the major portion, and you also talked about the largely coming from the Asia and India and China. But on one side, when we are saying in the United States they have reduced their carbon emission because of the push to the gas. But on the other side, how fair it is for the developed economy to advocate on the climate change when they are producing coal and pushing to the developing economy and reducing the price of coal there and incentivizing these international coal in these countries and producing more coal there. So is it a balanced debate in terms of climate change? OK. What a fantastic question, because this is a huge issue with Poland and the United States and the rest. They're still exporting the dirty burning fuel very quickly. Fatih is right out of time. Now it is pointed I tried to mention a few minutes.