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Page added on March 7, 2018

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‘Global oil sector needs $20tr investments over 25 years’


The global oil and gas industry needs to invest more than $20 trillion (Dh73.4 trillion) over the next 25 years to meet expected growth in demand and compensate for the natural decline in developed fields, Saudi Aramco Chief Executive Officer Ameen Nasser said on Tuesday.

Speaking at the CERAWeek conference in Houston, Nasser said the industry has already lost $1 trillion of investments since the oil price downturn from 2014 to 2016.

Future investments needed “will only come if investors are convinced that oil will be allowed to compete on a level playing field, that oil is worth so much more, and that oil is here for the foreseeable future,” Nasser said.

“That is why we must push back on the idea that the world can do without proven and reliable sources. We must challenge mistaken assumptions about the speed with which alternatives will penetrate markets.”

He noted that about 99 per cent of passenger vehicles on the road use internal combustion engines, even hybrid vehicles, and said electricity produced for battery-powered vehicles comes through power generation, which is still dominated by coal, particularly in markets like India and China.

Nasser said that even with the growth of electric vehicles, the increased demand from petrochemical markets over the next two decades will necessitate additional investment and need for crude oil. He noted “even conservative estimates” suggest the need for about 20 million barrels per day of new capacity in the next five years.

He said that he was confident that oil market fundamentals and future demand growth would be healthy, despite significant oil price volatility and forecasts of rising shale oil production.

Nasser only briefly referenced the plans for Saudi Aramco to go public, saying that it is “proceeding very well,” but that the company’s shareholder, the Saudi government, will ultimately have to decide when and where it will be listed.

The company is expected to list the IPO domestically, but there is significant jockeying between New York, London and Hong Kong for a potential second listing. Hong Kong is emerging as an increasingly likely compromise, according to two sources familiar with the matter.

Future roadmap

Saudi Arabia’s oil company isn’t afraid of electric vehicles. As it prepares to sell a stake in the company to investors, Saudi Aramco CEO Ameen Nasser says petroleum demand isn’t going away any time soon.

“I am not losing any sleep over ‘peak oil demand’ or ‘stranded resources,’” Nasser said as he shares a stage with oil historian Daniel Yergin. “We must push back on the idea that the world can do without proven and reliable sources” of energy.

“Oil and gas will continue to play a major role in a world where all energy sources will be required for the foreseeable future.”


7 Comments on "‘Global oil sector needs $20tr investments over 25 years’"

  1. bobinget on Wed, 7th Mar 2018 9:33 am 

    Total products supplied over the last four-week period averaged 20.3 million barrels per
    day, up by 3.4% from the same period last year. Over the last four weeks, motor gasoline
    product supplied averaged 9.0 million barrels per day, up by 3.3% from the same period
    last year. Distillate fuel product supplied averaged over 4.0 million barrels per day over
    the last four weeks, up by 0.6% from the same period last year. Jet fuel product supplied
    is up 18.3% compared to the same four-week period last year.

  2. bobinget on Wed, 7th Mar 2018 9:43 am 

    (EIA Repore, last week)
    Quite bullish. Confirms my prediction of shortage
    looming. We should be adding (more) storage this time of year. Note, imports were far higher.

    That double digit jet fuel consumption is mirrored around the planet. International trade is booming. We are so busy extracting the world’s remaining minerals we’ve no time to be concerned about climate, loony White House clowns, even humanity.

  3. Kenz300 on Wed, 7th Mar 2018 10:20 am 

    Kinda sounds like a pump and dump stock broker just before an IPO of their stock. Getting people to buy and prop up the price while they sell down their shares.

  4. bobinget on Wed, 7th Mar 2018 11:03 am 

    “Kenz300” (any relation to kenz 296?)

    Entire raison d’etat of this web site is petroleum.
    If I’m pumping anything, its a warning of higher
    fuel prices.

    ANY dramatic rise will almost certainly cause economic downturn.

    Foremost, food prices will rise.
    EVERY aspect of food, (like everything else) is
    inextricably tied to oil and gas.

    Best case would be a trading range between $65/$75. If by June we see higher,
    ‘bar the door, Katy
    Based on US inventory, exports, SPR sales to boot, look out inflated stock market.

    D. Trump’s ugly trade war threats, will cause Canada to grow a pair.
    Canada’s PM can and will force BC to permit Trans Mountain Pipeline. Now, Canada has access to thirsty Asian markets. (no longer a captive supplier)
    If Canada, our # 1 supplier, cuts just one million B’s p/d US will curtail our own exports. So much for balance of payments.

  5. bobinget on Wed, 7th Mar 2018 11:53 am 

    By Matthew Lee | AP March 6 at 10:59 AM
    WASHINGTON — Israeli Prime Minister Benjamin Netanyahu took aim at Iran on Tuesday, saying the Islamic Republic is responsible for “darkness descending” on the Middle East by building an anti-Israel empire.

    “Darkness is descending on our region,” Netanyahu told the annual pro-Israel AIPAC policy conference, blaming the “radical tyranny” in Iran for a litany of malevolent acts in Lebanon, Syria and Yemen and of continuing to seek Israel’s destruction.

    “We must stop Iran, we will stop Iran,” he said. Netanyahu renewed his attack on the 2015 Iran nuclear deal, saying it had made the world more dangerous. And, he praised President Donald Trump for threatening to withdraw from the accord if it isn’t toughened.

    He recalled that he had warned the Obama administration, which negotiated the deal under which Iran received billions of dollars in sanctions relief in exchange for curbs on its nuclear program, that the agreement would not make Iran a more responsible member of the international community.

  6. bobinget on Wed, 7th Mar 2018 6:07 pm

    Venezuelan production hits lows not seen since 1988.

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