Oil and Renewables: The need for simultaneous, non-exclusive evolution

I recently had the opportunity to share my vision on the energy industry in an article for El Nacional (link at the end) , where we discussed a paradox that defines our time: the urgent need to supply energy to a constantly growing world while drastically reducing our environmental impact.

As someone who has dedicated over 30 years to the global oil and gas industry , managing projects from the Caspian Sea to Latin America, I have witnessed multiple cycles of change. However, the current challenge is unique. We often hear narratives that portray a zero-sum battle between hydrocarbons and renewable energy. The reality, from a technical and investment perspective, is far more complex and nuanced.

The myth of immediate replacement

We need to be realistic about the timeline. As I mentioned in the interview, the time needed to replace fossil fuels was miscalculated. Technical reality tells us that coal could take between 20 and 50 years to disappear, and oil between 50 and 100 years.

This is not an excuse for inaction; it is a call to strategy. Natural gas, for example, emits half the carbon dioxide of coal and is emerging as the major transition fuel, estimated to account for 20% of future energy supply, complementing 70% from renewable sources.

Innovation: Evolving together

The key point I want to emphasize here—and which is central to Magnaccord Group SL's investment strategy—is that oil and renewables are evolving together. They are not enemies; they are necessary allies.

Today we see how the industry is adopting crucial decarbonization technologies:

● Carbon Capture and Storage: Companies in Brazil and Peru (such as Petrobras and Pluspetrol) are investing heavily in energy efficiency and the use of Artificial Intelligence to enhance processes.

● Asset Hybridization: The fusion of renewable sources with natural gas facilities, as PetroPerú has done, is fundamental to overcome the climatic intermittency of renewables and guarantee a constant supply.

● Industrial Self-Consumption: Large players like Repsol are using solar energy for their own extraction operations, thus reducing the carbon footprint of the barrel produced.

The challenge of capital and consensus

However, technology alone won't save us. As Goldman Sachs rightly points out, great ideas are needed to move forward, but capital is needed to turn those ideas into reality.

Currently, I am concerned to see promising projects delayed by budget shortfalls and, more critically, by a lack of consensus between government entities and operating companies. The costs of these advanced technologies—necessary to prevent climate change from costing us 138% more in mitigation—are high and cannot be borne solely by the private sector.

A look to the future

My concern is both personal and professional: "Our grandchildren are going to have a very hard time" if we don't act with balance. The effects of climate change are already visible in the form of droughts and unexpected turbulence during flights.

The energy transition is not about flipping one switch and turning on another. It's about smart integration where technological innovation and strategic investment allow fossil fuels to finance and facilitate their own orderly replacement.

As industry leaders, our responsibility is to look ahead, promoting a sustainable balance where operational excellence and environmental integrity go hand in hand.

What do you think about the role of natural gas as a bridge to renewable energy? I invite you to leave your comments and read the full article in El Nacional. https://www.elnacional.com/2025/03/innovacion-en-la-industria-energetica-como-el-petroleo-y-las-energias-renovables-evolucionan-juntas/