Over $10.5 Trillion Investments Required To Meet World’s Demand Of Oil In 2040, Says OPEC Secretary General

OPEC Secretary General, Barkindo

By CLEMENT NWOJI, Abuja

The Secretary General of Organization of Petroleum Exporting Countries (OPEC), Mohammad Sanusi Barkindo, has disclosed that going by growing demands in oil, investments of over $10.5 trillion is required to meet an estimated demands of 111.1 million barrels per day (mb/d) by the year, 2040.

However, he noted that extreme volatility in oil market has very negative consequences to consumers and producers, adding that it is disincentive for investments.

The OPEC Secretary General spoke on Tuesday while delivering special keynote address at the on going three-day Nigeria Oil and Gas Conference in Abuja which theme is “Driving Nigeria’s Oil and Gas Industry Towards Sustained Economic Development and Growth”

He maintained that oil constitutes the life blood of economic activities which requires collective agreements for its sustenance and investments in the sector to meet growing demands.

He said: “Indeed oil is so intrinsic in daily life that we sometimes overlook the fact that our industry has an impact on the individual experiences of billions of people.

“And while I would not for a minute, suggest that our industry is perfect, I believe we can take pride in oil’s role in fueling modern civilization, lifting millions out of poverty and contributing to sustainable development.

“Extreme volatility in the oil market has very
negative consequences for such consumers and producers. Low oil prices are bad for producers today and create situations that are bad for consumers tomorrow. And high oil prices are bad
or consumers today and lead to situations that are bad for producers tomorrow.

“Volatility is a devastating disincentive for investment, which is the lifeblood of our industry and essential for ensuring adequate supply in the future.

“Lack of investment on this scale has very
serious repercussions for future consumers, especially given the increase in world oil demand which is expected in the long term.

“According to OPEC’s World Oil Outlook, long-term oil demand is expected to increase by 15 mb/d, rising from 94.5 mb/d in 2016 to 111.1 mb/d in 2040.

“To meet the projected increase in global oil demand, investments worth an estimated $10.5 trillion will be required. Investment is also necessary to offset the impact of natural decline rates, which can be as high as 5% per year.

“To maintain current production levels, the industry might need to add upwards of
4 mb/d each year.”