Resource nationalism in many countries hampers investment in new oil and gas exploration and could spur declines, Antonio Brufau, Chief Executive at Spanish-Argentine oil firm Repsol YPF SA (REP) said Monday.
"90% of the world's oil resources are located in countries that limit foreign direct investment" in some way, Brufau said.
Increases in taxes on production, sudden change of contract terms, and the nationalization of oil and gas resources may lead to the decline in investments by international oil companies in the sector, he added.
He spoke at a plenary session of the World Petroleum Congress that starts here Monday and lasts through Thursday.
Repsol in recent years has been hard hit by the nationalization of the gas industry in Bolivia, state interference in the fuel distribution sector in Argentina, and rising production taxes in Ecuador.
As national oil companies control an increasing amount of world oil reserves, they need to cooperate more with private international oil firms in order to assure more investments in production, Brufau said.
Brufau also said that the effects of financial investments are impacting oil prices, as does the rapid economic growth in major developing countries.
"Developing countries will consume 50% of the world's energy within 15 years," Brufau said, adding that continued high oil prices will increase the rate of poverty in poor countries.
To dampen prices, joint action by governments and companies was needed to reach energy efficiency gains in both consumption and production, Brufau said.
Also, companies needed to invest more in unconventional oil sources, such as deep water drilling, or oil sands, he said.
Brufau also called upon European countries to unify their policies regarding energy security.
Before concerns regarding Russian gas supplies in early 2007, the European Union didn't even debate energy security, he said.
But the departure point on energy security in the various European countries is still too different, Brufau warned.
Instead of an increased European response to energy security concerns, countries currently are engaging in increased competition for energy resources, he said.
Gas supplies for Europe need to be more diversified geographically, Brufau said.
The CEO also called for the increased use of solar energy, and a comeback of nuclear power in order to address energy bottlenecks.