The global oil industry needs some $12.6 trillion in investments through 2045, the secretary-general of OPEC said at a videoconference, adding these investments would be essential for the industry to improve the efficiency of its operations.
“The global oil sector will need cumulative investment of $12.6 trillion in the upstream, midstream and downstream through to 2045,” Mohammed Barkindo said, as quoted by Azertac.
“At OPEC, we recognize the importance of energy efficiency as a means of reducing greenhouse gas emissions, while allowing for sustainable development. We also believe that dialogue between consumers and producers is critical to improving efficiency.”
OPEC earlier this month agreed to start boosting oil production—including the production of its non-OPEC partners in the OPEC+ group—by half a million barrels daily beginning in January.
Also this month, however, the cartel revised down its oil demand forecast for 2021. According to its latest Monthly Oil Market Report, demand for crude next year will only increase by 5.9 million bpd, a 350,000-bpd lower forecast than last month’s.
“Uncertainties remain high, mainly surrounding the development of the Covid-19 pandemic and rollout of vaccines, as well as the structural impact of Covid-19 on consumer behaviors, predominantly in transportation sector,” OPEC noted.
The cartel faces even greater challenges over the long term thanks to a rush among governments and companies, notably asset managers, to reduce greenhouse gas emissions. This would have a substantial impact on the oil industry, with some suggesting the world is already past peak oil demand.
OPEC+ is meeting on January 4 to discuss the next steps in its production control deal. While some members of the cartel are eager to start raising production, others are wary of the above-mentioned uncertainty despite the recent jump in prices, largely caused by positive Covid-19 vaccine news.
By Irina Slav for Oilprice.com
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