The Organisation of Petroleum Exporting Countries (OPEC) has projected that in order to sustain oil and gas sector’s contribution to global energy needs, investments should increase by $500 billion yearly in the sector from now to 2045, implying about $12.1 trillion investment during the period.
The oil cartel’s forecast was contained in its 2022 World Oil Outlook (WOO) inaugurated on Monday at the ongoing Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2022 in the United Arab Emirates (UAE).
ADIPEC is the global energy industry’s most influential meeting place which convenes ministers, energy leaders, and professionals to identify opportunities that will unlock new value in the energy landscape.
The WOO report also indicated that oil global primary energy demand would grow by 23 percent from now until year 2045 as socio-economic activities will continue to boom across geo-political frontiers in the world during the period.
Speaking during the launching of the publication, the OPEC’s Secretary-General, Haitham Al Ghais, said the 16th edition of the flagship publication incorporated analysis of the industry’s various internal and external linkages.
Specifically, he listed some of the highlights of the 2022 WOO as including that the world economy was expected to be more than double in size, and the global population rise by 1.6 billion between now and 2045.
Based on the outlook, Al Ghais said global primary energy demand was forecast to sustain growth in the medium and long terms, increasing by 23 percent in the period to 2045.
He further clarified: “The world needs to annually add on average 2.7 million barrels of oil equivalent a day to 2045, while all forms of energy will be needed to address future energy needs.
“Oil is expected to retain the largest share in the energy mix throughout the outlook period, accounting for almost a 29 per cent share in 2045.
“Other Renewables – combining mainly solar, wind and geothermal energy – expand by 7.1 per cent p.a. on average, significantly faster than any other source of energy.
“All major fuel types witness growth, with the exception of coal.
“Globally, oil demand is projected to increase from almost 97 million barrels a day (mb/d) in 2021 to around 110 mb/d in 2045,” he added
According to him, the outlook indicates that India is set to be the largest contributor to incremental demand, adding around 6.3 mb/d to 2045.
The oil cartel’s Secretary-General also disclosed that global refining capacity additions were projected at 15.5 mb/d between 2022 and 2045 while global oil sector would need cumulative investment of $12.1 trillion in the upstream, midstream and downstream through to 2045, equating to over $500 billion each year.
“Recent annual investment levels have been significantly below this, due to industry downturns, the pandemic, and the increasing focus on environmental, social, and governance (ESG) issues.
He said it dwelt on shifting dynamics that had seen a renewed focus over the past year of the interplay between energy affordability, energy security, and the need to reduce emissions.
Al Ghais said the WOO 2022 again underscored the increasingly complex nature of the global oil and energy industries.
First published in 2007, the WOO offers a detailed review and assessment of the medium- and long-term prospects for the global oil and energy industries to 2045.
