Harboursandport.com: --- Secretary-General of the Organisation of the
Petroleum Exporting Countries, OPEC, Mohammed Barkindo
, has disclosed that the crash in the global oil and gas sector has resulted in loss of over $300 billion between 2015
and 2016 due to fall in oil and gas exploration and production spending.
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| Secretary-General of the Organisation of the Petroleum Exporting Countries, OPEC, Mohammed Barkindo |
Barkindo, who revealed this in London, said the
gravity of the sharp contraction in oil industry investment, had been
underscored in the fact that last year and the year before, a dramatic rationalisation
of projects was witnessed, stressing further that global oil investment would require
about $10 trillion by 2040.
According to him, the international oil industry
cannot afford to see investment levels fall for a third year in a row, pointing
out that global oil and gas exploration and production spending fell by around
26 per cent in 2015 and a further 22 per cent in 2016.
“Combined, this equates to above $300 billion. This
has impacted new projects coming on-stream and new discoveries too”.
He stressed that stability in the oil market today
was also vital for stability in the future, given that the oil industry was
very much a medium- to long-term business.
“Moreover, the industry remains a growth business.
We see the world requiring more oil in the years ahead. Oil will remain a fuel
of choice for the foreseeable future.”
In OPEC’s latest World Oil Outlook, WOO, oil was
still expected to supply over 26 percent of the world’s energy demand by
2040. Oil demand increased by around 17 million barrels/day between 2015
and 2040 to reach close to 110m b/d, he observed.
“This will require significant investments. And new
barrels are needed to not only increase production, but also to accommodate for
decline rates from existing fields,” he said. According to him, the world
still needs about $10 trillion of investment in the oil and gas sector by 2040.
“Overall, we see oil-related investment requirements
of around $10 trillion over the period to 2040.” Barkindo asserted that the oil
industry needed regular, timely and sustainable investment to guarantee
security of supply to the global community.
“It is essential for our industry’s future and that
of the global economy. It is essential to all those consumers around the world
who rely on hydrocarbon resources for their everyday needs. And it will be
essential to the future of those currently without access to modern energy
services,” he stated.
In this regard, the OPEC Secretary General contended
that it should not be forgotten that 62.7 billion people still relied on
biomass for their basic needs and 1.3bn had no access to electricity.
“The energy transition should take this global
challenge into account.”
Barkindo said that it was also important to note
where the future supplies were expected to come from. OPEC’s World Oil Ooulook,
WOO, projected that non-OPEC liquids production would see a recovery in the
medium-term, after dropping considerably in 2016. However, it would reach a
plateau over the next decade, reaching 61.4m b/d in 2027, before declining to
58.9m b/d by 2040.
“In the long-term, it is OPEC that will be required
to meet much of the expected additional demand,” noted Barkindo.
He said in terms of crude, OPEC’s supply was
estimated to increase to 41m b/d by 2040, an increase of around 9m b/d from
2016, while non-OPEC supply was anticipated to witness an overall decline of 2m
b/d.
With agency report
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