‘Oil industry needs $10 trillion investments in 25 years’

There are indications that the global oil and gas industry would need about $10 trillion to meet the growing demand by the year 2040, according to the Organisation of Petroleum Exporting Countries (OPEC).

The Secretary General, OPEC, Abdalla S. El-Badri, who made this known at the executive plenary session of the Kuwait oil and gas show and conference, last week, said the global energy demand is expected to expand by around 50 per cent by the next 25 years.

In this regard, 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.

Adding that the growth would therefore require some major investments, El-Badri, said: “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,” he said.

Speaking on the theme: ‘Future Hydrocarbon Resources: Innovation, Technology and Opportunities’, the OPEC secretary said the three 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 however emphasised that the world would need 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.

“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,” he said.

Urging the investors to tap the opportunities in innovation and new technologies, he said the industry’s past successes are a reminder that innovation and new technologies are key to unlocking the abundant sources of oil and energy in an ever more sound, secure and responsible manner.

“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,” El-Badri said.

He 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.

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.”