IEA's Birol: 20% Upstream Investment Needed This Year

IEA's Birol: 20% Upstream Investment Needed This Year
Without significant exploration and production investment in 2017, spare oil capacity will drop to 14-year-low as demand ratchets up to meet production, Fatih Birol, IEA executive director says.

Global upstream investment in 2017 would need to increase at least 20 percent above last year’s total to meet future demand growth, said Fatih Birol, International Energy Agency (IEA) executive director.

That level of investment is critical after two years of record plunge, he said. Without it, spare capacity could be as low as 2 percent in 2022 – a 14-year low.

Fatih Birol
Fatih Birol, Executive Director, IEA
Executive Director, IEA

“Global investment is not encouraging,” he told reporters Monday during the first news conference of the 2017 CERAWeek by IHS Markit in Houston. “It’s very worrying for us in terms of supply.”

Releasing the IEA’s Market Report Series Oil 2017 findings, Birol said demand will increase by 7.3 million barrels per day (MMbpd) between now and 2022. The growth will be driven by Asian demand, particularly India which is expected to overtake China as the ‘center of oil demand growth,’ Birol said. While Asia will continue to draw resources from the Middle East, trade routes in general will shift and lengthen.

Global production capacity during the next five years will grow 5.6 MMpd, led by the United States, Brazil and Canada, he said.

An apparent lack of investment this year to balance demand growth with shrinking capacity is the “main worry,” Birol said. Without intervention, the market will tighten amid supply security concerns increased volatility.

As such, double digit spending growth is needed to meet demand growth and “give us some peace,” Birol said.   


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

More from this Author
Deon Daugherty
Senior Editor | Rigzone
 -  The Rigzone Interview: Private Equity ... (Jul 13)
 -  Could Argentinian Politics Beat the Va... (Jul 10)
 -  The Rigzone Interview: Oil, Gas Goes D... (Jul 6)
 -  Deal Of The Month: EQT, Rice Energy Me... (Jun 30)
 -  OpEd: OPEC Production Cuts Fail, Marke... (Jun 27)

Most Popular Articles

From the Career Center
Jobs that may interest you
Automation Engineering Manager
Expertise: Electrical Engineering|Engineering Manager
Location: Houston, TX
Senior Accountant
Expertise: Accounting
Location: Chantilly
Channel Development Manager Job
Expertise: Business Development|Sales
Location: Minneapolis, MN
search for more jobs

Brent Crude Oil : $56.86/BBL 0.76%
Light Crude Oil : $50.66/BBL 0.21%
Natural Gas : $2.959/MMBtu 0.30%
Updated in last 24 hours