THE Organisation of Petroleum Exporting Countries, OPEC, has disclosed that $11 trillion would be required to invest in oil and gas exploration, production, refining and distribution of petroleum products between now and 2040.
In his presentation at the CSIS Luncheon, Washington DC, USA obtained by Vanguard, the Secretary-General of OPEC, HE Mohammad Barkindo stated: “This is all brought home by the scale of the investment requirements. Oil-related investments across the upstream, midstream and downstream are estimated at around $11 trillion in the period to 2040.
“We also need to recall that exploration and production spending fell by an enormous 27 per cent in both 2015 and 2016, and only increased by 8 per cent in both 2017 and 2018. This only adds to the worry that if our industry is concerned about policies that detrimentally impact oil and investments, with talk of stranded assets and declining values of oil; then we have a potentially dangerous scenario, one that could increase volatility significantly and lead to a future energy shortfall.
“Additionally, as often noted by Bob Dudley, BP’s CEO, we need to emphasize this is not a race to renewables alone; it is a race to lower greenhouse gas emissions. We believe that we need to constantly improve the environmental footprint of all the energies we use.
“For oil and gas, the environmental challenge is not oil and gases themselves, it is the emissions that come from burning them. In OPEC, we are firm believers that solutions can be found in technologies that reduce and ultimately eliminate these emissions.”
He said: “In this regard, I welcome coordinated action within the industry, governments and through various research and development platforms such as the Oil & Gas Climate Initiative. It is vital that we collectively develop and adopt technologies, as well as all-inclusive energy policies that would address carbon emissions, not crowd out investments in oil.
“We need to remind all stakeholders that oil and gas is responsible for much of today’s economic growth, development and prosperity, and a long-term investment in our industry should be viewed as both prudent and profitable. It was the late, great US President, Ronald Reagan, who said: “The future doesn’t belong to the faint-hearted. It belongs to the brave.
“While the times we live in often appear turbulent and the challenges daunting, experience has repeatedly shown us that the enduring principles of cooperation and the audacity to try something new, such as the ‘Declaration of Cooperation’, can bring about some measurable success.
“OPEC and non-OPEC participants in the ‘Declaration of Cooperation’ took a brave step at the end of 2016, and we fully believe that the re-balancing of the market and the focus on a sustainable stability over the past two years or so, has been beneficial to the global oil industry, and to both producers and consumers.
“As an industry, one that is vital to both the US and OPEC, we also need to be brave. We need to continually break down barriers; we cannot work in silos if we are going to change misconceived perceptions and make our voices heard.”
After all, we are all in the same boat. We need to ensure that this vital global resource continues to fuel the world, in a secure, reliable, and ever-cleaner manner.”