Future oil demand: World needs $25trn investment
Saudi Aramco’s chief executive, Amin Nasser, has said in order to meet up with future oil demands, the world needs to invest US$25 trillion in new oil-producing capacity over the next 25 years.
Nasser said this at the World Economic Forum in Davos, Switzerland on Wednesday.
The CEO of Saudi Arabia’s giant state-held oil company said global demand for oil and gas will grow bigger in years to come.
This means that if capital investment drops, it could create “spikes” in prices and negatively affect the global economy.
On fears that oil demand is depreciating, Nasser said demand is still healthy and oil “will be with us for decades”.
According to him, the global oil and gas industry needs to expand and requires more investment.
After two years of the drop in capital investment by the industry due to oil price crashes, a recent report by Wood Mackenzie suggests that “the global investment cycle will show the first signs of growth in 2017, bringing the crushing two-year investment slump to a close”.
WoodMac said there will be an E&P global investment rise with about 3 percent in 2017 to around $450 billion.
According to WoodMac’s Malcolm Dickson,‘’companies will get more bang for their buck,” as internal rates of return jump from 9 to 16 percent, comparing 2014 to 2017.
