By Yange Ikyaa
Fornational and multinational oil companies to continue innovating and flourishing, they must also ensure that they have predictable and unfettered access to investment capital.
This was the view of Muhammad Sanusi Barkindo, Secretary General of the Organization of Petroleum Exporting Countries (OPEC), during his address to an international gathering of the oil and gas industry community at the Nigerian Oil and Gas (NOG) Conference in Abuja, the nation’s capital.
The OPEC scribe, who reiterated that regular investment at adequate levels is the lifeline of the oil and gas industry, also disclosed that the global oil sector will need cumulative investments of up to $11.8 trillion in order to guarantee energy availability and accessibility in a sustainable manner.
According to him, “looking further down the road, OPEC’s most recent oil outlook gives us some perspective on what is to come. It shows that the global oil sector will need cumulative investments of $11.8 trillion in the upstream, in the midstream, and in the downstream through to 2045 in order to meet current and future demand.”
Barkindo further stressed that the oil and gas industry is under siege, as the evolving geopolitical developments in world, such as the ongoing war in Ukraine, the Covid-19 pandemic, and inflationary pressures across the globe, have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity market in general.
In a very short time span, the oil and gas industry has been hit by two major cycles, the severe market downturn in 2015/2016 and the even more far-reaching impact of the Covid-19 pandemic.
Also, in 2020, OPEC figures show that the first year of the pandemic and one of the darkest periods in the history of oil, upstream oil capital expenditure fell by around 30 percent. This exceeded the colossal 26 percent annual declines experienced during the severe industry downturn in 2015/2016.
This scenario, the OPEC Boss said, is further being compounded by a number of industrialized countries and multilateral institutions that continue to pursue stringent policies aimed at accelerating the energy transition and fundamentally altering the energy mix.
The good news, however, is that, with regard to demand itself, Barkindo said there is only one direction to go, and that is up.
“In fact, we in OPEC project that total primary energy demand will expand by a robust 28 percent in the period to 2045. Oil is expected to retain the largest share of the energy mix, accounting for just over 28 percent share in 2045, followed by gas at around 24 percent,” he said.
In other words, this means that oil and gas together will continue to supply more than half of the world’s energy needs for many decades to come. These hydrocarbon resources are especially vital to the global energy mix, particularly in regions such as Africa, which will see massive population shifts and economic growth in the coming years.These developments therefore increase the urgency of eradicating another pandemic, which Barkindo called “the energy poverty.”
