Lukoil exec sees oil sector losing $1 tln investment in 2014–2017
BRUSSELS, Nov 8 (PRIME) -- The international oil industry may lose about U.S. $1 trillion of investment in 2014–2017 triggering a supply deficit and a high price volatility, Leonid Fedun, a vice president of Russian oil major Lukoil, said on Tuesday in a conference.
“The oil industry will lose about $1 trillion of investment in 2014, 2015, 2016, and 2017. We can already say that the existing demand will not be satisfied by about 7 million barrels of the current output until 2025,” he said.
“The imbalance of supply and demand will lead to a very high volatility on the market, where we will see sky-high jumps of and rapid plunges of oil prices, which is not good.”
The world oil consumption will grow to 108–109 million barrels per day by 2030 from the 2015 figure of 94.7 million barrels. It would have grown to 140 million barrels if there were no electric cars, he said.
“So we have to produce oil in order to satisfy the demand. But oil has a tendency of natural contraction (of output at existing fields). The average dynamics of contraction stands at 3.1% per year. So every year we have to increase output by 3–3.5% to satisfy the current and future demand,” he said.
“Thus, we will have to produce about 39 million barrels of oil more by 2030, which accounts for 40% of the existing production, given the fact that no colossal oil field is discovered in the past 15 years,” he said, adding that the industry has to rely on conventional fields and the U.S. shale oil industry.
End