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Global oil production to fall short of rising
Monday, February 4, 2008
LONDON (Thomson Financial) - Global oil production will struggle to cope with rising demand over the next decade, according to experts gathered today at international think tank Chatham House, for a conference focusing on Middle East energy supplies.
One speaker noted that over the next eight years the world needs to discover and develop an extra 37.5 mln bpd to meet rising demand and diminishing returns from existing oil fields, but that global production is unlikely to increase by even half that amount in the same timeframe.
"China and India are transforming the global energy system by their sheer size and growth," the speaker said.
"Oil demand is set to grow significantly under any plausible scenario. (But) there will be real difficulty in getting production above 100 mln bpd."
Global oil production is currently around 86 mln bpd, but with many existing oil fields given lower returns in recent years, and new reserves becoming more difficult to source, some analysts are concerned oil markets could tighten significantly as rising demand outstrips supply.
Analysts speaking at the event have predicted that national oil companies -- such as PetroChina, Brazil's Petrobras, or Russia's Gazprom -- will take on an increasingly significant role in the market in the coming years.
As oil prices have increased, countries like Russia have tightened the screws on foreign investors, as they aim to take greater control of their country's natural resources.
However, analysts have cautioned against freezing out large international oil companies, instead encouraging a cooperative approach to addressing a potential short-fall in global supplies, saying national companies need to tap the expertise and technology of their private sector rivals.
