Uche Usim, Abuja
The Oil Producing Exporting Countries (OPEC), on Tuesday, disclosed that a whopping $10.3 trillion investment would be required to meet the 15 million barrels per day (mb/d) projected increase in global oil demand from 94.5 mb/d in 2016 to 111.1 mb/d in 2040.
This was as the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, revealed that the nation has a crude oil deposit of over 39 billion barrels that could sustain the country for over 50 years by which time a veritable alternative energy sources would have been developed. Kachikwu further said the golden objective was achieving higher production volume at at less cost as it is presently.
The two senior industry stakeholders spoke, in Abuja, at the opening of the 18th Annual Nigeria oil and gas conference.
In his remarks, Secretary General of OPEC, Mohammed Sanusi Barkindo, said the $10.3 trillion investment was also necessary to offset the impact of natural decline rates, which could be as high as five per cent per year.
He said, “To maintain current production levels, the industry might need to add upwards of 4 mb/d each year.
“This background gives a sense of the gravity of the situation as OPEC and its non-OPEC partners held series of meetings which culminated in the Declaration of Cooperation among which entails promoting mutual respect among all nations.
“Bringing together 25 sovereign producing nations is unparalleled in the history of the oil industry. The “Declaration of Cooperation” strategic partnership constitutes a fundamental and essential feature of the ‘new world of energy.’
“A long-absent element of stability has been reintroduced to the market – industry optimism and confidence abounds. It is a transparent and fully accessible platform; open to all producers.
“It has evolved into a broader continuity partnership that can work for everyone, across all time frames, to help deliver the sustainable market stability we all desire,” Barkindo stated.
Also speaking at the conference, Kachikwu said the theme: ‘Driving Nigeria’s Oil and Gas Industry Towards Sustained Development and Growth’, was apt considering the robust investments of the Federal Government has made in the sector in its quest to take it to the next level.
He said though there was a widespread belief that the demand for crude oil was greatly reducing due to the production of electric vehicles, he however noted that the reverse was the case as many industry experts forecast that oil demand will remain high till 2050s.
“The oil industry is at a critical stage of it’s cycle today. The demand is still there. Electric cars is just 2% of mobility today.
“Oil demands keep increasing up till 2050s. Oil is still being found and we, according to DPR, we have 39 billion barrels to last us for over 50 years.
“What value it brings to the populace is key. We need to produce at much cheaper costs.
“Our cost of production is almost the highest among OPEC countries. We need to bring it down from $32-$33 a barrel to $15 a barrel. Some countries are bringing it down to $8/barrel.
“We need to tow same path. We need to check what other countries are doing to drive down cost.
“Excuse of opportunities infrastructure, militancy, etc, can no longer hold water. The industry potential are enormous. It will help crisscross other sectors so by the time it fritters away, we would have impacted the country well
“Achieving this includes good policies because competitive pressure within global Oil market is intensifying.
“OPEC has helped but there’s huge amount of investment on shale. Countries not firming up regional markets can no longer sell and we must do that l.
“Actual consumption market has dwindled. Asia looks for how to firm up regional markets.
“We have huge gas reserves and we need to grow gas production from 200tcf to grow 600tcf so we can now to provide sufficient gas for electric and cooking gas production,” Kachikwu explained.