World energy leaders see slow oil recovery, renewables growth

Dhaka,  Wed,  23 August 2017
Published : 11 Mar 2017, 18:11:37
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World energy leaders see slow oil recovery, renewables growth

Heads of major energy companies have predicted that the oil slump is likely to continue through 2017 and the near future will see petroleum profit growth while natural gas, clean coal, wind and other renewables increase the bottom line of environmentally savvy companies, reports Xinhua.

During the annual CERAweek by IHS Markit event March 6-10 in the energy capital of Houston, Texas, heads of major energy companies and agencies provided insight into that future. Earlier in the week, OPEC Secretary General Mohammad Sanusi Barkindo and International Energy Agency Executive Director Fatih Birol took on the question of where the oil energy is in the price cycle.

"We have an arrangements to compare (market) outlooks," Barkindo said. "I agreed with Fatih to break the barrier between producers and consumers. We decided not only to establish a new relationship, but in the best interests of the global community." Birol cited an oil market report on Monday that suggests the oil market is growing but slowing down, with no peek in oil demand but showing a second growth in shale markets.

Oil companies who came together in Vienna in December began implementing a six-month plan committing to readjusting supply by 1.8 million barrels, and Barkindo said the numbers are looking good even ahead of the February review.

"The numbers are trickling in and promising to be much higher," Barkindo said. "In July, we will look at how well we have achieved (the Vienna agreement)."

Birol said the US shale oil market is producing well, as is Canada and Brazil. While 2017 "doesn't seem very promising," he said the US is producing spare capacity to two per cent of the global demand and investments need to be made without delay.

By 2040, Barkindo said, the industry will need 10 trillion US dollars to meet demand.

"It is incumbent to gear up and meet the losses to maintain a sustainable level going forward," he said.

Barkindo said that though the Russian ambassador is not ready to join OPEC, the 24 oil-producing countries that met in Vienna to update the oil prices were more structured with partners led by Russia.

"We are turning a historic page in oil that has the potential of maintaining stability," he said.

Birol said investments in the oil industry are needed to meet demand at a time when electric cars are expected to permiate the auto industry and a time when Asian trucks are now responsible for one-third of the oil market demand.

"We will still see growth in oil market... but the message to the oil industry in Houston: Invest, invest, invest," Birol said. "We have to find place for everybody here -- co-habitation. Shale, oil, gas, fund managers."

"We in OPEC, we are seeing the shale revolution at the time it was welcome," Barkindo said. "If you recall, there were significant reductions in Nigeria, my country, and in Iran because of sanctions. The market will also rebalance itself in the balance of time, but peek demand does not feature in the forseeable future." Birol said the world is entering the golden age of gas and shale oil, where there has been a 450 per cent growth, is replacing coal in the United States and many countries that want to reduce carbon dioxide emissions.

"Renewables are mainly focusing on the electricity," Birol said. "Renewables are no longer a rich man's fuel. China is number one in renewables as India is moving to the centre of oil energy."
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