Daily Management Review

Wood Mackenzie: the world will soon need new large oil fields


10/02/2018


Market participants and analysts are focused on forthcoming reduction in oil supplies in connection with US sanctions against Iran, which will be introduced in November. However, the market faces a more disturbing problem.



The U.S. National Archives
The U.S. National Archives
Experts predict that unless large oil fields are opened in the near future, the world will face an oil shortage as early as the mid-2020s, Oilprice.com writes.

According to estimates of the consulting company Wood Mackenzie, the supply shortage will arise in the middle of the next decade. Given the current level of technology and the discovery of deposits, the oil deficit may reach 3 million barrels per day by 2030, 7 million bpd - by 2035 and 12 million bpd - by 2040.

It's not that there are no discoveries, they are simply not enough to compensate for the natural decline in mature fields, while the global demand for oil is expected to continue to grow.

Exploration expenditures dropped sharply after the fall in oil prices in 2014. The good news, according to Wood Mackenzie, is that the amount of new discoveries correlates with exploration spending. Therefore, in the event of an increase in costs, the likelihood of discovering new oil fields should increase.

"Guyana (in Latin America) is one of the few giant oil fields discovered during the recession. The fact is that we need more Guyana, much more, and we need them soon. Without them the oil market will face a shortage in the near future, "said Wood Mackenzie chief analyst Simon Flowers.

As reported earlier, the International Energy Agency (IEA) in September announced that world oil consumption will exceed 100 million bpd in the fourth quarter of this year.

Last month, OPEC Secretary General Mohammed Barkindo also announced that world oil consumption will reach 100 million bpd later this year.

"The world will reach a mark of consumption of 100 million barrels a day later this year - much earlier than we had all predicted earlier. Therefore, stabilizing forces is needed that create conditions for attracting investment," Barkindo said at an energy conference in Cape Town (South Africa).

source: oilprice.com






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