By Ayobami Adedinni
The Secretary General of the Oil Producing and Exporting Countries, (OPEC), Sanusi Barkindo has said that a sum of $16 trillion is needed in the Oil and Gas sector to increase production from new areas.
He made this known in an interview ahead of the international petroleum week.
According to him, this is to not only increase production from new areas, but also to compensate for existing fields on the decline.
In his words, “Between now and 2040, an estimated $10 trillion in oil-related investments will be required, and for gas, roughly $6tn. OPEC’s member countries are ready to make the required investments in production, as well as research and development (R&D), so as to ensure that the future requirements of consumers are met in a timely and sustainable manner.
“The fact is our industry needs a steady flow of ongoing investments to ensure the required supply gets to consumers in both the medium and long term, and OPEC will be instrumental to making this happen.
“The outlook on global oil demand is also positive. It is estimated to increase from roughly 93mn b/d in 2015 to over 109mn b/d by 2040. In relation to natural gas, demand is set to rise from around 350bn cf/d in 2015 to 590bn cf/d in 2040”
On the challenges posed by the US Shale Gas, he said, “As far as non-OPEC supply goes, we see a decline during 2016 and 2017 due to recent lower oil price levels, but then a gradual increase to 2021. From the long-term perspective, we expect non-OPEC supply to continue to rise steadily, reaching a high of 61.4mn b/d in 2027, before dropping to 58.9mn b/d in 2040.”
This he said points to the fact that OPEC will be needed to fulfill much of the additional long-term oil demand. For crude, this means an estimated 8.9mn b/d between 2015 and 2040, and for all liquids, 12.6mn b/d. The share of OPEC crude in the global liquids supply is forecast to increase from approximately 34 per cent today to 37 per cent by 2040.
According to him, with the development at the end of last year, OPEC will work with industry stakeholders.
“We will continue to work closely with our fellow industry stakeholders. This includes further strengthening the consultations between OPEC and non-OPEC oil producing countries, as well as evolving existing and developing new dialogues to help better understand the challenges and opportunities we face.
“In this regard, let me stress that it is vital that we have open channels of communication so that we are able to take timely and pro-active measures to ensure a balanced oil market on a sustainable basis.
It is evident that the current oil market has presented our industry with tremendous challenges, but we should remember that ‘tough times’ are nothing new for the industry,” he added.