The hydrocarbon sector requires cumulative investments of $17.4trn by 2050 to meet rising demand and to generate the additional five million barrels per day needed on average every year to stay at the current overall supply levels, according to Haitham Al Ghais, Secretary General of OPEC.
Long-term investments in the hydrocarbon sector have come under increasing focus as the energy sector prepares for a diversified and decarbonised future energy mix, with companies such as bp recently committing to increasing their annual oil and gas investment to $10bn.
Al Ghais said, “The oil sector requires cumulative investments of $17.4trn by 2050. This is necessary to meet rising demand and to counter declining rates, with the latter requiring an additional five mb/d on average every year just to stay at current overall supply levels.
“For this reason, OPEC has repeatedly called for greater investments in the oil industry. All our actions and activities, especially under the umbrella of the DoC [Declaration of Cooperation], have been to facilitate an investment-enabling environment. Such an environment requires sustainable stability in the oil market.”
His comments came at the 11th Joint IEA-IEF-OPEC Workshop on the Interactions between Physical and Financial Energy Markets, held recently at the OPEC Secretariat in Vienna.
The high-level meeting was chaired by HE Al Ghais, along with HE Jassim Alshirawi, Secretary General of the International Energy Forum (IEF), and Toril Bosoni, Head of the Oil Industry and Markets Division of the International Energy Agency (IEA).
Key discussions at the workshop included recent factors impacting oil market volatility, strategies to explore global oil trade flows, inter-regional arbitrages and their impact on major crude benchmarks, and the financing opportunities to sustain oil and gas developments.
With global energy consumption set to rise dramatically, OPEC’s latest World Oil Outlook (WOO) sees global primary energy demand increasing by 24 per cent to 2050, based on an increasing population, rising urbanisation, an expanding middle class, and emergent energy-intensive technologies, as well as the need to bring energy to billions of people that still go without.
In a recent thought leadership for Energy Connects, Al Ghais observed that any discussion on future energy pathways has to address all the great interlinked energy challenges, such as ensuring and expanding energy accessibility, meeting rising energy demand, improving energy security, maintaining energy affordability and reducing emissions.
“We need to embrace all energies, leverage all available technologies, and consider the needs of all peoples.
“Overcoming the energy trilemma and navigating geoeconomic shifts in energy markets requires a pattern of predictability for investments in hydrocarbons and clean energy technologies, as well as close collaboration on physical and financial energy market transparency,” according to Jassim Alshirawi, Secretary General of the International Energy Forum (IEF).
“More inclusive dialogue is needed for scenarios to better guide decision makers navigating geoeconomic shifts on real-world energy markets. Overcoming the energy trilemma requires a three-pronged approach: predictability to sustain trade and investment in fossil fuels and clean energy technologies; complementary policies to ensure interconnected energy and technology markets function without friction, reducing price volatility and increasing affordability; and enhanced collaboration on physical and financial energy market transparency, including clean energy technology and sustainability data,” Alshirawi told delegates at the workshop.
