World to feel shortage of new oil production projects in several years
BAKU, Azerbaijan, Dec.17
By Leman Zeynalova – Trend:
The world will feel the shortage of new oil production projects in several years, according to Major Trends in the Global Liquid Hydrocarbon Market to 2035 report released by Russia’s Lukoil company, Trend reports.
Lukoil said that the majority of the major oil fields were discovered in the 1950s and 1960s.
“Most major fields are currently in the late stages of development, which are characterized by a natural decline in production. The volume of liquid hydrocarbon reserves discovered annually is declining. New discoveries are dominated by reserves with high development costs. In the last few years, the biggest discoveries have been made in deepwater offshore areas,” reads the report.
The fall in oil prices in 2014 led to a sharp decline in investment in oil production and exploration projects and in 2016, the volume of investment in oil projects was almost two times lower than in 2014.
“Since 2016, there has been a tendency towards a slow increase in investment. However, the current volume of investment is still way below the 2012-2014 levels. The decline in investment has led to several negative consequences for the industry. Firstly, a number of new projects have been rescheduled or postponed. Secondly, the natural decline in the production of mature fields has accelerated. Thirdly, new discoveries have become few and far between.”
“These tendencies create the conditions for a supply shortage in the market. According to our estimates, the shortage of new production projects will begin to be felt in 2022–2023.”
LUKOIL is one of the largest publicly traded, vertically integrated oil and gas companies in the world accounting for more than 2 percent of the world's oil production and around 1 percent of the proved hydrocarbon reserves.
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