IEA: Oil Industry Needs More Investments

IEA: Oil Industry Needs More Investments

Tuesday, 6 March, 2018 - 12:45
London - Asharq Al-Awsat
US shale oil output is set to surge over the next five years, stealing market share from OPEC producers and moving the United States, once the world’s top oil importer, closer to self sufficiency, the International Energy Agency said on Monday.

However, IEA stressed that the oil industry needs to quickly step up investment to meet rising demand as the booming US shale sector will only be able to meet global needs for crude for the next two years.

“The United States is set to put its stamp on global oil markets for the next five years,” IEA’s Executive Director Fatih Birol said in a statement.

"But as we've highlighted repeatedly, the weak global investment picture remains a source of concern. More investments will be needed to make up for declining oil fields - the world needs to replace 3 million barrels per day of declines each year, the equivalent of the North Sea - while also meeting robust demand growth."

A landmark deal in 2017 between OPEC and rivals including Russia to curb output to reduce global oversupply improved the outlook for other producers as prices rose sharply throughout the year, the IEA said in Oil 2018, an annual report looking at the next five years.

As a result, US oil output hit a record late last year, and it is expected to rise by 2.7 million barrels per day (bpd) to 12.1 million bpd by 2023, as growth from shale fields more than offsets declines in conventional supply.

Last year, the IEA forecast US shale production to grow by 1.4 million bpd by 2022 with oil prices of up to $60 a barrel and by up to 3 million barrels with oil at $80 a barrel.

Natural gas liquids will add another one million bpd to US supply to reach 4.7 million bpd by 2023.

With total US liquids production set to reach nearly 17 million bpd in 2023, up from 13.2 million in 2017, the United States will be by far the world’s top oil liquids producer.

Oil production growth from the United States, Brazil, Canada and Norway will more than meet global oil demand growth through 2020, the IEA pointed out, adding that more investment would be needed to boost output after that.

Non-OPEC production is set to rise by 5.2 million bpd by 2023 to 63.3 million bpd with the United States alone accounting for nearly 60 percent of global supply growth.

Output from OPEC producers will grow at a much slower pace, according to IEA, which added that it expected Venezuelan production declines to accelerate, offsetting gains in Iraq. Birol said Venezuela’s production outlook may need to be cut in coming years as well.

Therefore, OPEC’s crude oil capacity will grow by just 750,000 bpd by 2023, the IEA said.

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