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World to need at least 1.1 trillion barrels of hydrocarbons over next 20 years

Oil&Gas Materials 27 November 2020 14:29 (UTC +04:00)
World to need at least 1.1 trillion barrels of hydrocarbons over next 20 years

BAKU, Azerbaijan, Nov.27

By Leman Zeynalova – Trend:

Over the next 20 years, there’ll be demand for at least 1.1 trillion barrels of oil and gas, Trend reports with reference to Wood Mackenzie.

“While that’s a big opportunity, it is far less than the total available resources. Portfolios must be built around only the best oil and gas resources among those plentiful supply options. Assets with the lowest breakeven, lowest carbon and the best chance of commercialisation will fare better. Exploration can play a part in renewing the pipeline of such projects,” the company said in its analysis.

“Relative advantage tends to fade over asset life: fields often start out as very attractive assets, but that changes as they are depleted. So, companies that want to remain successful must invest – or risk their portfolios becoming increasingly uncompetitive.”

Wood Mackenzie noted that greenfield upstream project returns have massively underperformed in the past decade.

“The industry’s focus on capital efficiency, however, has brought costs back under control. Returns are starting to recover, but the future looks uncertain.

There’s plenty of upside, though: the pre-FID pipeline looks healthy. Deepwater oil stands out, both in scale and quality. On the other hand, there are growing complexities in sanctioning spend on large, long-life assets such as LNG and oil sands. While they provide long-term cash flow, the returns from many mega-projects have been disappointing. Faced with an uncertain future, projects with short payback times will have the advantage,” said the company.

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Follow the author on Twitter: @Lyaman_Zeyn

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