BAKU, Azerbaijan, October 9. The upstream sector, which constitutes the majority of oil sector investment needs, is projected to require $11.1 trillion in 2023-2045 , equivalent to an annual average of $480 billion, Trend reports.
According to OPEC, regionally, the majority of this investment, about 65 percent, will initially be concentrated in North America. This is due to its relative size and importance in medium-term supply growth, as well as the relatively high cost of developing Canadian oil sands, deepwater reserves, and tight oil in the US. Over time, the proportion allocated to North America decreases as the significance of developing resources in other regions grows.
Investment needs in the upstream sector for the rest of non-OPEC countries, excluding North America, are expected to rise from $107 billion annually in 2022 to $177 billion per year by 2045, the bloc forecasts. In contrast, OPEC Member Countries are projected to experience a fourfold increase in investment requirements, rising from $35 billion per year in 2022 to $136 billion annually in 2045.
While upstream investment is expected to increase by 13 percent in 2023, reaching $360 billion, this merely brings capital expenditure back to pre-pandemic levels, OPEC pointed out, adding that challenges or calls to reduce upstream investment can be counterproductive and elevate the risk of supply shortages and market volatility.
In addition to the upstream sector, estimated investment needs in the downstream and midstream sectors are calculated to be $1.7 trillion and $1.2 trillion, respectively, for the period from 2023 to 2045. In summary, global investment requirements for the entire oil sector are estimated to reach $14 trillion in the long term, averaging nearly $610 billion annually