Baku, Azerbaijan, Oct. 25

By Maksim Tsurkov – Trend:

The oil market will be really affected by the investment pause associated with lower oil prices after 2021, said BP Chief Economist for Russia and CIS Vladimir Drebentsov during the presentation, “BP Statistical Review: Oil and Gas Markets in Transition” and forecasts until 2035 in Baku Oct. 25.

He added that no decisions about investment in about 50 oil projects worldwide were made as a result of lower oil prices which have been observed since late 2014.

"The investment volumes in the oil industry declined,” Drebentsov said. “There is such a notion as investment lag, which means the period between the decision-making to invest in a project and oil supply to the market, which takes an average of 5-7 years. If the investment decision had been postponed in 2015, then this oil would not have appeared in the market until 2020 and the market would not have expected it.”

The expert added that the portfolio of projects that will bring oil to the market within the next 4-5 years includes those projects, investment decisions on which were adopted until 2014.

"The decision on those projects was made when the prices were high,” he said. “After the prices dropped, the projects are still being implemented. In terms of OPEC's actions of establishing a balance in the oil market, there is such a feeling that the situation may change after 2021.”