BP: Oil demand to remain central part of energy system for next 10–15 years
BAKU, Azerbaijan, Sept.25
By Leman Zeynalova – Trend:
Oil demand will remain the central part of the energy system for the next 10–15 years, Spencer Dale, group chief economist of BP plc, said, Trend reports.
“Sometimes people think that once oil demand peaks, somehow demand goes away and vanishes. That is clearly not the case. In all the scenarios, oil demand remains a central part of the energy system for the next 10–15 years. The levels of investment needed in upstream oil and gas are between $10–20 trillion over the next 30 years. So even if we do see peak oil, oil is going to play a critical role in our energy system for the next 10 or 15 years, requiring significant levels of investment,” he said.
Dale believes there is a need to set a strategy which is good for a world where oil demand is sort of rising back up above pre-COVID levels and staying there and another one where it is falling off by about 10 million barrels a day.
“That is what resilient strategies are, not trying to pick, whether it is one year or another year,” noted Dale.
He went on to add that with the shift to a lower-carbon energy system, two things are happening in terms of oil and gas.
“One is increasing competition across fuels. You can see this most naturally for gas, where gas is having to compete far more competitively against renewable energy in the power sector. In oil, we are seeing increasing competition in transport, where oil is now competing against electricity and also natural gas. So, one: competition across fuels.
“Secondly, also, competition within fuels. In the world I showed you, say, for oil demand, oil demand in some scenarios goes back to about pre-COVID levels but it is not growing very significantly. In others oil demand is starting to contract. In that world we are going to have increasing competition within oil as owners of oil resources compete to make sure that their oil is produced and consumed. So, I think the message for countries who are large oil and gas exporters is the world is going to become more competitive, with heightened competition. To make sure you are a winner in that world, you need to make sure that your oil and gas upstream operations are as efficient as possible so you can compete in this increasingly competitive world,” said the group chief economist.
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