OPEC Seminar Speakers Call for Continued Investment
Source: Oil & Gas Journal, Uchenna Izundu (3/19/09)
"There is no other viable source of energy now to take the burden of oil and gas."
The industry must continue to invest in capacity and human resources to ensure that it will be able to address the upturn, said David O'Reilly, chairman and chief executive officer of Chevron Corp. "International oil companies need a stable investment environment, access to resources, and a commitment to invest in skilled people and assets."
The industry will need to invest $400-500 billion/year through 2030, according to O'Reilly, but this investment is being threatened by the credit crisis. About 30-45 million b/d of capacity is required by the middle of the next decade.
Nobuo Tanaka, executive director of the International Energy Agency, warned that OPEC's spare capacity could be reduced further if projects were deferred; it would stand at 3.5 million b/d in 2013.
The speakers complained that current prices were too low to underpin new investment in supplies and capacity. Abdalla Salem El-Badri, secretary general of OPEC, said his country, Libya, has 150 ongoing projects but had delayed 35 projects until after 2013. "Companies are going to renegotiate terms as these were undertaken during high prices. This will delay their implementation for so many years and we'll have a shortage. There is no other viable source of energy now to take the burden of oil and gas."