The following two interviews revolve around oil and are with the chief executive officer of Royal Dutch Shell and the chairman of Total SA, two of the oil majors.

The first interview was on CNBC and featured Peter Voser, the chief executive officer of Royal Dutch Shell.  Regarding the reasons that oil’s price has been so high, given the current uncertainty revolving around the global economic recovery, Voser expressed the following thoughts: (1) the stimulus packages have been driving demand, and thus supporting the price; (2) OPEC has exercised good discipline and kept producing oil, but cut back production enough to allow continued investing; (3) the companies have continued investing during this time to avoid a future supply shock, which will cause the price of oil to surge.

Furthermore, Voser states that since 2004 the industry’s costs have doubled and have not receded as much as companies had hoped for during the recession.  In order to continue to match supply with demand, which will increase as population and economies grow, the industry requires more technology growth, more workers, more fields, and more infrastructure.

Joseph Stigilitz, chimed in that alternative non-carbon sources of energy must be developed and pursued.  Voser responded that he agreed that the energy sources must be widen.  However, the world cannot flip a switch from carbon one day to completely non-carbon the next day.  There has to be an integration.  Historically, for a new technology to account for nearly 1% of the global energy market it requires 25 years to go from  the research and development stage to the commercialization stage.

The second interview was on Bloomberg and featured Thierry Desmarest, the chairman of Total SA.  Total is investing in both West Africa and Central Asia.  He thinks that the price will be around $70 to $80.  This price level provides enough profit for the producers and provides incentives to encourage further investment.  Believe that in the mid-term the oil price will definitely increase given the fundamentals of the markets. In regards the economic recover, he thinks that people’s hopes are a bit ahead of the fundamentals, cannot expect the demand in general industry to comeback over night.

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