By Martin Morris
Korean think tank cites underinvestment in new oil fields due to global crisis.
A leading South Korean economic think tank says world crude oil prices may surge through the psychologically important $100 per barrel mark in three years.The LG Economic Research Institute (LGERI) made the prediction Tuesday on the basis that the development of new oil fields has dipped substantially, due to the global financial crisis, WAM news agency reported.
The LGERI is an economic research arm of the LG Group, one of the country's major business conglomerates.
While global investment in oil fields rose by an average of 21 percent from 2003 to 2007, the trend was reversed last year due to the global economic turmoil, Lee Gwang-wu, a senior researcher at the LGERI said.
Noting that major investment banks had slashed their commitments to new fields by 10 to 20 percent in 2008 Lee said this may lead to a long-term oil shortage.
He said the effect of reduced investment will emerge in 2012 when non-OPEC countries will not be able to provide sufficient enough oil to the global market, adding that OPEC is expected to take a decision to strategically control oil production, thereby making its presence increasingly felt.
3 years at the outside. My prediction is 121-18 months max. The only company ready is Saudi Aramco. Iraq's increased produciton will never materialize in time. Kuwait's will never increase as long as the MPs run the oil business.