UAE Minister of Energy Suhail Al Mazrouei said the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC countries need to increase investment in the energy sector as the world was not ready to face another price “shock”.
“The world economy cannot face another shock. We need minimum investment in the industry as we don’t want to run out of supply,” Al Mazrouei said after announcing the launch of the third GCC Petroleum Media Forum in Abu Dhabi, which will take place in April 2017.
“Yes, shale oil will re-bounce but in how many days, when you know that 450,000 people have been laid off from the services? Those people are not going to come back overnight to bring a million barrel per year in the US. We can see the recovery next to the corner… we are willing to invest and now others are joining us.”
Al Mazrouei, speaking about the planned investment in the UAE oil industry over the next few years, said Abu Dhabi National Oil Company’s (Adnoc) 2030 strategy was part of the country’s investment move, which was to make the UAE ready to meet any future demand by increasing Adnoc’s production capacity by 400,000 barrels a day to 3.5 million barrels a day in 2018.
On Monday, the minister said the supply glut in the market had almost gone but declining energy-industry investment could trigger price spike.
Global energy spending is down $300 billion in the past two years and could fall for the third year, OPEC Secretary-General Mohammad Barkindo has said.
"Spending on global oil and gas exploration, and production declined by 26 percent in 2015 and is expected to fall by further 22 percent this year," he said, adding almost $10 trillion worth of investment is required by 2040 to meet future oil and gas demand.
In its World Oil Outlook report 2016, released on Tuesday, OPEC forecasts crude demand to increase to over 109 million barrels per day (bpd) by 2040 from 93 million bpd in 2015 with oil and gas continuing to contribute 53 percent to the global energy mix by 2040. Prices will average $40 a barrel in 2016, but is expected to rise by $5 per barrel in each of the following years till 2020.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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