The Organisation of Petroleum Exporting Countries (OPEC) says that investments of $11.8 trillion will be required between 2021 and 2045 in the upstream, midstream and downstream oil sectors.
Mr Mohammad Barkindo, OPEC Secretary General, disclosed this in his remark on Wednesday at the 23rd World Petroleum Congress (WPC) being held in Houston, the United States (U.S.).
Barkindo spoke during a plenary session entitled ‘Energy Transition: Scenarios for the Future’.
He said that OPEC’s World Oil Outlook (WOO) 2021 showed that upstream capital expenditure fell by around 30 per cent in 2020 as a result of the impact of the COVID-19 pandemic.
According to him, this follows drops of 27 per cent in 2015 and 2016.
“Investments have not recovered since a global level of $700 billion was witnessed in 2014, and they were at only half this level in 2020.
“The return of investments is a core objective of the Declaration of Cooperation between OPEC and non OPEC producers, which has done so much to return balance and stability to the market since the onset of the pandemic in early 2020.
“If the necessary investments are not made it could have knock-on implications, and leave long-term scars, particularly for security of supply, affecting not only producers, but consumers too,” he said.
According to the secretary general, the WOO 2021 also sees global energy demand expanding by 28 per cent by 2045 which underlines the need to have a holistic view of the energy sector, and appreciate what each energy source can offer.
“For oil and gas, some believe that these industries should not be part of the energy future, that they should be consigned to the ‘dustbin of history’, and that the future is one that can be dominated by renewables and electric vehicles.
“It is important to state clearly that the science does not tell us this, and the statistics related to the blight of energy poverty do not tell us this either.
“Renewables are coming of age, with wind and solar expanding quickly, but – even by 2045 – in our WOO they are only estimated to make up around 24 per cent of the global energy mix.
“Oil and gas combined are forecast to still supply over 50 per cent of the world’s energy needs by 2045, with oil at around 28 per cent and gas at just over 24 per cent.
“It is important to stress that many OPEC Member Countries have great solar and wind resources, and huge investments are being made in this field.
“OPEC welcomes the development of renewables, which will be vital to help quench the world’s growing thirst for energy.
“In terms of electric vehicles, there is no doubt that they will continue to see expansion in the transportation sector,” he noted.
He further noted that its WOO showed that the share of electric vehicles in the total road transportation fleet was projected to expand to close to 20 per cent in 2045.
However, he said for many of the world’s population, electric vehicles did not offer a viable alternative to the internal combustion engine, primarily due to cost.
“There is also debate about how environmentally friendly they are considering their build process, especially the required batteries, mining for minerals and metals, and the sourcing of the vehicles’ electricity.
“The key point to make is that the challenge of tackling emissions has many paths. It is not just one path for all, whether that be a country or an industry.
“We fully believe that the oil and gas industries can be part of the solution to tackling climate change, and evolving the energy transition,” he said.
