The world would find itself short of oil from 2025 onwards as exploration for longer-producing crude reserves is set to lag demand growth, Vicki Hollub, chief executive of Occidental Petroleum, said at the Davos forum on Tuesday.
For most of the second half of the 20th century, oil companies were finding more crude than global consumption, around five times the demand volumes, Hollub said, as carried by Reuters.
The ratio of discovered resources versus demand has dropped in recent decades and is now at around 25%.
“In the near term, the markets are not balanced; supply, demand is not balanced,” Oxy’s CEO said.
“2025 and beyond is when the world is going to be short of oil.”
According to the executive, the oil market will find itself moving from an oversupply in the near term to a long period of supply shortages.
Oil industry executives have been warning that new resources, new investments, and new supply will be needed just to maintain the current supply levels as older fields mature.
One of the most persistent warnings has come for years from Saudi Arabia, the world’s largest crude oil exporter, and its state oil giant Aramco.
The Kingdom and Aramco have repeatedly said that the focus of the energy sector and the debates on the energy transition should be on how to cut emissions, not on reducing oil and gas production.
Speaking at the Energy Intelligence Forum in October, Aramco’s chief executive Amin Nasser said that the Saudi oil giant is working on renewables, e-fuels, hydrogen, and carbon capture and storage (CCS). But the world will need oil and gas for decades and renewables won't meet this need for decades, he added.
The additional oil and gas demand over the coming decade needs new upstream investments to offset the 5-7% annual decline rates, Nasser noted.
By Charles Kennedy for Oilprice.com
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