Mohammed Sanusi Barkindo, secretary general of the Organization of the Petroleum Exporting Countries, OPEC, has said that the vibrant global transition to renewables notwithstanding, oil will retain its number one position in the energy mix, providing 28 per cent of global energy needs.
With the global population set to expand to 9.5 billion by 2045 and huge potential for socio-economic development in terms of expanding access to modern energy services for the under-served, demand for hydrocarbons will still remain sufficiently strong.
With the exception of coal which will remain stunted, the cartel stated that renewables’ global fuel share will rise over 10% by 2045, followed by gas, driven in part by higher urbanization rates, industrial demand and its competitiveness over coal in power generation.
In its latest World Oil Outlook, OPEC predicts that global oil demand will rise from a pandemic stricken 90.6 million b/d in 2020 to 108.2 million b/d in 2045, from which it will remain largely flat.
Mohammad Sanusi Barkindo, OPEC’s secretary-general, stated that the growth in demand will be frontloaded in the first five years, when oil demand will rise 2.6 million b/d yearly, before slowing to 600,000 b/d from 2025-2030 and then 300,000 b/d from 2030-2035.
To meet forecast market needs, Barkindo says $11.8 trillion in oil-related investments will be required through 2045, mostly in the US upstream.
If the necessary investments are not made, OPEC argued that it could have knock-on implications, as viewed in current gas developments in Europe and elsewhere around the world, leaving long-term scars, not only for producers, but consumers too.
“Let me stress that the return of investments is a core objective of the Declaration of Cooperation. The investment requirements clearly underline that any talk of the oil and gas industries being consigned to the past and of the need to halt new investments in oil and gas is wrong-headed”, Barkindo warned.
Despite an anticipated rise in the number of electric vehicles to about 500 million by 2045, representing almost 20 per cent of the global fleet by then, OPEC noted that internal combustion engine vehicles are set to retain the largest market share at over 76 per cent by 2045, with oil demand in the road transportation sector expected to stay at around a level of 46mb/d after 2025.
This position of OPEC is shared with Nigeria’s Department of Petroleum Resources, DPR.
DPR Director, Sarki Auwalu, who allayed concerns over the future of crude oil globally, stated that the continued relevance of the resource would be due to a number of factors.
The factors as availability, accessibility, affordability, reliability, and efficiency, adding that this character of petroleum gives it a degree of comparative advantage over emerging energy alternatives for secured and stable energy supply.
Auwalu argued that the current apathy towards crude oil is not driven by technical and economic considerations alone. According to him, the ongoing narratives of the relative significance of each energy type and the clamor of ‘end of oil era’ is not informed by technical and economic considerations alone but by global geopolitics and the vagaries of neo-colonialism as well.