Oil is here to stay, says the IEA
The world’s consumers are not yet ready to say goodbye to the era of oil, while the demand for gas is in the fast lane, thanks to its flexibility, says the International Energy Agency (IEA).
IEA executive director Dr Fatih Birol said last week there was robust growth in global oil demand. This came from shipping, aviation and trucks, especially in Asia, but most importantly from growth in petrochemicals.
Birol told delegates attending Africa Oil Week, in Cape Town, that a third of global oil demand would come from petrochemicals and was expected to grow strongly beyond 2030.
“Global oil demand will continue to rise over the coming decades. There’s no question about that. The important thing is to meet that demand at affordable prices for all of us.”
He also warned that upstream investments were not coming in on time and could create challenges for oil markets in the early 2020s.
“[Apart from] the US shale business, we’ve seen a big decline in upstream investments across the world.”
In Africa, the picture was also worrying.
“In Africa, our numbers show that, between 2014 and today, upstream investment declined by more than 50%.”
But Birol said there was positive news in the emergence of gas reserves.
“Africa’s gas production is set to increase sharply. It’s expected to rise by roughly 150% over the coming decades. Africa is becoming a global player in gas,” said Birol.
He said liquefied natural gas (LNG) was “ushering in a new global gas order”, which provided opportunities for both importers and exporters across Africa.
“Today, pipelines have a higher share than LNG, but, as a result of developments, the share of LNG is growing.”
Nigeria, Mozambique “and, hopefully, soon Tanzania” would come into the picture, he said.
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