$12.1 trillion investment required in oil sector by 2045: Opec chief

The global oil sector will need an accumulative investment of $12.1 trillion till 2045 which is around $500 billion a year, said Haitham Al Ghais, Secretary General, Opec.

While speaking at the 30th Annual Middle East Petroleum & Gas Conference (MPGC 2023), Ghais said oil is expected to retain the largest share in the energy mix throughout the outlook period, accounting for almost 30 per cent in the year 2045.

“Global economy in 2045 is expected to double the size it is today. The global population is set to increase by 1.6 billion by 2045. As a result of these global economic and demographic changes, energy demand is forecast to increase by a significant 23 per cent from now till 2045. Such an increase in demand necessitates adequate investment,” Opec chief said during the opening remarks of the MPGC 2023 conference.

Warning about underinvestment

Al Ghais also warned about the decline in investment in the energy sector which amounts to nearly 4-5 per cent.

“Despite the urgent need for investment, we have heard disheartening calls from someone to divest from hydrocarbons. Opec has been very clear in highlighting very real and dangerous consequences of divestment or under-investment in the oil industry as it causes market volatility, endangers energy security, imperils economic growth and jeopardises sustainable development. Given these high stakes as an industry, we need to speak with one voice and louder than ever before of harmful realities of underinvestment,” he said.

As an antidote, he called for international cooperation based on mutual respect, multilateralism and constructive dialogue - not constant and inconsistent criticism.

“It is encouraging that many Opec countries have headed the call to invest in all sectors of the oil value chain. They are also investing significantly in the downstream sector,” he added.

Citing examples, he said Adnoc is ramping up production capacity to 5 million barrels per day by 2030, Aramco is taking steps to increase production to 13m bpd by 2027, Kuwait to 4 million bpd and Iraq to 6 million bpd.

“Opec believes that challenges before us be accurately diagnosed. It is about reducing greenhouse gases emission and not a misguided narrative of replacing one energy for another,” he said, adding that member countries invest heavily in hydrocarbon projects, carbon capture utilisation storage facilities and circular carbon economy.

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