Oil and gas will continue to play a central role in achieving sustainable economic development and reducing energy poverty, OPEC Secretary General Mohammad Sanusi Barkindo said at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC).
Citing data from the 2019 OPEC World Oil Outlook, Barkindo said the organisation’s analysis predicted a 25% increase in total primary energy demand worldwide between 2018 and 2040, with oil and gas expected to meet most of this demand. He said growth would be driven by rising demand in developing countries, where almost one billion people still lacked access to electricity and three billion had no access to clean fuels for cooking.
“All forms of energy will be required to meet this expanded demand in a sustainable way,” Barkindo said during his presentation. “Renewables are contributing the largest growth in percentage terms, including significant expansion in investment in OPEC member countries, particularly here in the UAE. Natural gas has the largest growth in terms of replacing coal (for electricity generation), and oil retains its role with the largest share in the energy mix.
“In fact, oil and gas combined are still expected to make up more than 50% of the energy mix at 2040.”
He said the proportion of demand coming from China, India and other emerging markets would continue to grow, particularly from Asia-Pacific markets. Non-OECD demand would increase by 21.4 mb/d (million barrels per day) by 2040, compared with 2018 figures, while the OECD was expected to reduce by 9.6 mb/d. Total oil demand was expected to reach 110.6mn barrels, with an estimated $10.6trn of investment needed across the upstream, midstream, and downstream sectors.
However, he noted that it was important that growth be achieved within the context of reducing carbon emissions and that new technologies must be developed to ensure the industry could contribute to economic growth, while also helping limit climate change.
“The oil industry must be part of the solution to the climate change challenge,” Barkindo said. “The science tells us that we need to reduce emissions, it does not tell us that we need to choose one energy over another. Thus, we need to continually evolve and adopt cleaner energy technologies across the board, ones that enable us to meet expected future energy demand, in a sustainable and ever more efficient manner, and where no-one is left behind.”
The OPEC World Oil Outlook analyses developments in areas such as the global economy, energy demand, oil supply and demand, policy and technology developments, and environmental and sustainable development concerns.