Oil deficit will equal Kuwait output - IEA
November 13, 2008
By Alexander Kwiatkowski
London - The world must find an extra 64 million barrels a day of oil production by 2030, equivalent to replacing Kuwait's output every year, to meet demand growth and counter the decline of existing fields, the International Energy Agency (IEA) said yesterday.
The agency, an adviser to 28 nations, forecasts global oil demand will rise by 1 percent a year through 2030, while the output decline at existing fields will accelerate to 8.6 percent from 6.7 percent. There must be "adequate and timely" investment in global oil output for supplies to suffice, the Paris-based IEA said in its annual World Energy Outlook.
"There remains a real risk that underinvestment will cause an oil supply crunch" by 2015 as the decline in output from mature oilfields sped up, said the agency. "The gap now evident between what is currently being built and what will be needed to keep pace with demand is set to widen sharply after 2010."
An additional 64 million barrels a day of additional production must be bought on stream between 2007 and 2030, the group said. That is about 2.78 million barrels a day every year.
The world would need to invest more than $26 trillion (R264 trillion), almost twice the annual domestic product of the US, by 2030 to ensure energy supply, said the agency.
Oil consumers will find themselves more reliant on Saudi Arabia and other Opec members as oil fields in Europe, Russia and North America decline.
Global energy demand to 2030, including oil, natural gas and coal, was set to grow by 1.6 percent a year to 17.01 billion tons of oil equivalent, "just over half" of this accounted for by India and China, it said.
The agency cut its global oil demand estimate for 2030 by 10 million barrels a day to 106 million barrels, "reflecting mainly the impact of much higher prices and slightly slower GDP [gross domestic product] growth".
The impact of the global financial crisis on demand would not be sufficient to offset rising demand in developing countries, led by China and India, the agency said.
"The current financial crisis is not expected to affect long-term investment, but could lead to delays in bringing current projects to completion," according to the report.
Oil prices, which had dropped by more than half from a record $147.27 a barrel in July, might exceed $200 a barrel in nominal terms in 2030, the agency said. Global oil demand growth will average 1 percent a year in the period, with all of the increase coming from developing economies.
Production "has already peaked in most non-Opec countries and will peak in most others before 2030".
Saudi Arabia, the largest member of the oil producers' cartel, was projected to pump 15.6 million barrels a day in 2030, said the agency.
Spending on new oil and gas production already exceeds the amount required if investment were channelled to lower-cost regions such as the Middle East.
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