| The global oil industry is going through a period of low activity, but its future prospects remain intact, according to a new report by the Organization of the Petroleum Exporting Countries (OPEC).
The group’s new World Oil Outlook 2045, published in September, notes that the global economy will more than double the size of its current levels in the next 25 years, and will continue to be fuelled by oil and gas resources, while the global population will reach 9.5 billion by 2045, compared to 7.7 billion in 2019.
“Oil will remain the fuel with the largest share of the global energy mix until 2045,” the group said in its report. “Healthy growth rates are expected especially over the medium-term horizon, resulting in oil demand reaching the level of 94.4 million barrels of oil equivalent per day (boepd) in 2025 and further progressing to 99.5 million boepd in 2045.”
The oil industry meets more than 31% of global energy demand and is projected to remain the largest contributor to the energy mix in the next 25 years, accounting for more than 27%, followed by gas, about 25%, and coal, almost 20%, the group predicts.
In fact, the industry will need to accelerate investments to meet global oil demand, future upstream spending will need to average USD 380 billion each year over the long term, which translate to USD 9.9 trillion.
“Added to USD 1.5 trillion for the downstream, and USD 1.2 trillion in the midstream, cumulative oil-related investment requirements over the long-term will be USD 12.6 trillion,” OPEC estimated.
Investment in OPEC member countries will need to step up, rising from an average requirement of USD 32.4 billion in the 2020-2025 period, to nearly USD 70 billion per annum in 2041-2045.
As non-OPEC production retreats due to higher costs, OPEC will step in to fill the gap. OPEC liquids supply will increase from 33.8 million bpd in 2019 to 43.9 million bpd in 2045, resulting in member countries’ share of global liquids rising to 40% by 2045, from its market share of 34% in 2019. All told, global demand will rise almost 10 million bpd to 109 million bpd by 2045.
OPEC members’ oil production will rise 10.1% from 2019 to 2045, while non-OPEC will grow 0.4% during the same period, amid a slowdown in US shale oil production. On the consumption side, China will lead demand, rising annually by 1.4% over the next 25 years to require 14.4 million bpd. India will also be a major consumer, with demand in the world’s second most populous country rising 1% annually until 2045.
Other Asia (0.9% annual growth rate) will also be a major demand centre. OPEC countries will see consumption surging 0.8% annually.
“Considering high fluctuations during the medium-term period, average incremental demand to 2025 is projected at around 0.7 mbpd per annum.” A comparable rate of growth is also expected in the period to 2030.
“This, however, will change quite significantly during the next five-year period as the decline in the OECD accelerates and demand growth in the non-OECD region starts to decelerate. To sum up, global oil demand will grow at relatively healthy rates during the first part of the forecast period before demand plateaus during the second half,” the group said.
In a landmark move, Saudi Aramco exported its first blue ammonia shipment to Japan. The company announced that 40 tonnes of high-grade blue ammonia have already been dispatched to Japan for use in zero-carbon power generation.
The Saudi-Japan blue ammonia supply network demonstration spanned the full value chain, including the conversion of hydrocarbons to hydrogen and then to ammonia, as well as the capture of associated carbon dioxide (CO2) emissions, the company said.
Companies involved in the project include Aramco unit Saudi Arabian Basic Industries Corp. (SABIC) and Mitsubishi Corporation, which is represented on the Institute of Energy Economics, Japan study team in partnership with JGC Corporation, Mitsubishi Heavy Industries Engineering, Ltd., Mitsubishi Shipbuilding Co., Ltd. and UBE Industries, Ltd.
“The announcement comes amid growing appreciation of the role hydrogen will play in the global energy system,” the company said. “Ammonia, a compound consisting of three parts hydrogen and one part nitrogen, can contribute to addressing the challenge of meeting the world’s growing energy needs in a reliable, affordable and sustainable manner.” |
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