Coleman told the World Petroleum Conference in Istanbul last week there was no point oiler kvetching about the competition from renewables.

 

"People will always get in and solve a problem, particularly where there's a financial incentive," he said.

 

"Renewables will play a significant role into the future and we need to think about how we play with that."

 

With a change in the energy mix underway there would be both challenges and opportunities to face.

 

"The economic rationalists amongst us always like to say it's difficult to see how renewables come into the marketplace, but those countries that are not rich in resources but are users of energy are often motivated, whether for geopolitical or social reasons, to make or incentivise investments that may not make the grade when it comes to investment return," he said. 

 

"It's a social investment return that goes beyond normal economics we consider as we make our investments."

 

Despite that Woodside, one of the world's largest LNG exporting companies, said there was no question that gas would continue to have a significant role in meeting world energy demand, and it was up to oil and gas companies to help manage market uncertainties and reassure buyers that gas would remain both reliable and affordable into the future.

 

As part of that, gas suppliers need to be more sophisticated and flexible in our contracting and marketing to deal with a more fluid market, involving multiple players.

 

Part of that will require companies to appeal to new customers for conventional uses of the product, but also proactively build markets for new uses.

 

The markets are changing as more gas is being traded globally and more flexibly, and the new dynamics are affecting shipping, contract sizes and the number of countries gas suppliers are dealing with, all of which mean the very basis of how companies plan their operations is being upended.

 

"We are dealing with more customers, different types of customers and customers who have different needs and expectations with respect to the length of contracts, the conditions attached to them and the pricing point. Many buyers are seeking shorter and more flexible contracts," he said.

 

"Some want smaller LNG parcels. Spot market activity is increasing. These are all contrary to the investment thesis for long-cycle LNG projects that have payback periods typically of 15 years or more and very, very deep capital requirements upfront."

 

However, the increased supply is also lowering prices, which increases the challenges for project operations and financing, but also fuels growth in demand.

 

Coleman said a key challenge would be ensuring that companies other than the very largest could finance projects because "that's not a good thing going into the future if we want to ensure we have supply."

 

Coleman said gas-fired power could complement renewable generation and provide a level to stability that even battery storage is yet to meet.