Governments should lower trade barriers and cut taxes for the oil and gas industry to boost production and help stabilize global oil prices, the chief of oil giant BP PLC said yesterday.
Tony Hayward, chief executive of Europe’s second-largest oil producer, said the world is not short of oil and gas resources but that high operating costs, rising taxes and lack of access are hampering investment in new production capacity.
The inadequate supply to meet rising demand has led global oil prices to reach records, he said.
PHOTO: AP
“The problem is not below ground; the problem is above ground,” Hayward told a two-day oil and gas conference in Kuala Lumpur.
“The taxes that governments take from the oil and gas industry have continued to increase across the world. I believe this is unsustainable and counterproductive. All it means is that we have less money to invest in new production,” he said.
“Governments must also cooperate to lower trade barriers and tariffs,” he said.
“These are unproductive and run counter to the essential truth that a free and open energy market is just about the best possible guarantee to energy security,” he said.
He criticized government use of subsidies to shield consumers from rising oil prices, saying it was unsustainable as it strained public finances and discouraged sensible fuel efficiency measures.
Crude futures made their biggest single-day leap ever on Friday, soaring nearly US$11 for the day to US$138.54 a barrel but retreated below US$138 in Asian trading yesterday.
Some analysts have predicted that prices could keep climbing amid strong demand in Asia and tight supplies in the Western Hemisphere.
Hayward said there were still 42 years of proven oil reserves and 60 years of natural gas left and vast quantities of other unproven resources and unconventional hydrocarbons such as heavy oil and oil sands.
“We need to invest in new technology, to invest in capability and in alternative energy ... the key to new investment is to make the market work by getting the conditions right,” he said.
The International Energy Agency estimates that investments of US$22 trillion are needed between now and 2030 to meet future energy demand, Hayward said.
BP has raised its capital spending this year to US$22 billion, up nearly 15 percent from last year, to boost production, upgrade its refineries and investing in alternative forms of energy, he said.
Hayward called for increase partnership between private oil companies and national oil firms, which hold 80 percent of world resources.
Hassan Marican, chief executive of Malaysian national oil company Petronas, also urged governments to gradually remove fuel subsidies.
He said the subsidies had caused “unmitigated consumption and market distortions that are unmanageable in the long run.”
Malaysia and India last week became the two latest Asian nations to cut fuel subsidies, sparking protests nationwide as pump prices of gasoline and diesel rose sharply and inflation set to soar.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to