Thursday, 22 October 2015

OPEC SAYS OIL INDUSTRY REQUIRES $10 TRILLION INVESTMENTS IN 25 YEARS

Indications have emerged from the Organisation of Petroleum Exporting Countries (OPEC) that the global oil and gas industry would need about $10 trillion to meet the growing demand by the year 2040, Tectono Business Review reports.

This was revealed by the Secretary General of OPEC, Mr. Abdalla S. El-Badri, at the executive plenary session of the Kuwait Oil and Gas Show and Conference, last week. According to him, the global energy demand is expected to expand by around 50 per cent by the next 25 years.

In view of this, he said all forms of energy would be needed, such as wind, solar, hydro, nuclear and of course fossil fuels, which would continue to play major role in meeting the demand. He added that the growth would require some major investments.

In his own words: “In terms of oil, with demand projected to grow to 110 million barrels a day by 2040, oil-related investment requirements are estimated to be around $10 trillion between now and then. With all this in mind, let me stress that there is no doubt that the world has enough oil and energy resources to meet these expected future needs. The most recent analysis for the remaining ultimately recoverable oil resources puts the figure at 2.8 trillion barrels. And for natural gas, it is over 420 trillion standard cubic metres.”

While speaking on the theme: ‘Future Hydrocarbon Resources: Innovation, Technology and Opportunities’, at the conference, Mr. El-Badri said that the three forms of energy are not only vital to developing the industry’s future hydrocarbon reserves and other related activities, they have also been central to its past.

He underscored the need for more energy in the decades to come as the global population expands, economies grow, and countries seek to provide the energy poor with access to modern energy services.

He said: “We need to remember that many billions of people still rely on biomass for their basic needs and more than a billion still have no access to electricity.”

While urging the investors to tap the opportunities in innovation and new technologies, the OPEC Secretary General said that the industry’s past successes were a reminder that innovation and new technologies were key to unlocking the abundant sources of oil and energy in an ever more sound, secure and responsible manner.

In his own words: “In the coming years and decades, the industry can expect to see additional new technologies shift perceptions and prospects once more. This will be achieved through such developments as carbon capture and storage, advancements in enhanced oil recovery and the development of new oil-based materials for various industry sectors. It all points to the simple facts that the industry’s future will require more research and development; it will need more investment; and it will need more people.”
The OPEC Secretary General, however, stressed the need for human capital development, noting that all the innovation, technology and opportunities that are created in the industry depend to a great extent on the availability of talented and skilled people.

While lamenting the challenges of drop in oil prices in the last 16 months, he said: “At OPEC, we are hopeful that the industry will see a more balanced oil market in 2016. But we should keep in mind the fundamental importance of ensuring that the people in our industry continually push for innovation and the development of new technologies, that can help discover, extract, produce and supply more hydrocarbons in an ever more cost effective and sustainable manner.”