The Organization of Arab Petroleum Exporting Countries (OPEC) confirmed that the outlook for the future confirms that we are faced with the fact that the world needs all available sources of energy. Therefore, it requires increased investment in all of the resources to ensure the adequate levels of supply in the future, particularly from the main supplier "crude oil."
A recent report by the International Organization said that currently there are proven reserves of crude oil exceeding 1.2 trillion barrels. It also notes that it is important to recognize the progress and many positive aspects of oil resources that have affected the lives of billions of people throughout the world over hundreds of years.
The report said that without oil resources, mankind would not have been able to achieve economic growth and access to many forms of development and prosperity and the building of modern civilization. The report added that, "it is necessary for the oil industry to push the investment urgently to reach levels that would provide energy requirements for future generations." It noted that the latest estimates confirm the need to inject new investments worth 10.5 trillion dollars in various fields of industry from now until 2040.
The report quoted Mohamed Barkindo, Secretary-General of the Organization, as he said that, "it is also important to remember very well that this issue is not just an issue of an increase in new production, but producers need to focus on positive economic aspects, including strong demand growth and continuing to push the market on the path of stability." He said that the current cooperation efforts that are between producers need to maintain a good amount of patience, perseverance and focus.
The report stressed that the demand for the urgent need to revive investment also comes in terms of compensation rates of natural decline in existing oil fields, which can be within 5 per cent per year. It noted that in order to maintain the level of current production of oil only, the industry needs to add four million barrels per day every year. The report stated that it is encouraging to see the start of the investment boom in relative recovery since late last year, which is expected to continue this good level of performance during the current year 2018. It is considering that the current recovery is still lower than what have been achieved in the past periods of the life of the industry.
It stressed the need to revive the market by focusing on meeting the urgent need to invest in long-term projects, which will have the upper hand in the growth of industry in the distant future.
The report monitored OPEC members' continued investment in the oil industry even in the darkest periods and in the fragile and volatile economic cycles experienced by the market in the past years. This enabled the OPEC countries to maintain their leading roles as a reliable supplier for the markets of the developing countries around the world as well as for the industrialized countries especially in Europe.
The report highlighted Barkindo's assertions that the foundation for investment growth can only come when balance and full market stability are achieved. He argued that long-term supply security is intrinsically linked to the stability and recovery of the market in the short term.
The report pointed out that the "historic declaration" on cooperation between producers in and outside OPEC is in the second year of serious application after a broad success achieved in the first year. It also stressed the importance of an effective framework for sustainable development in order to achieve market stability. The report confirms the determination of the OPEC countries and their partners to move forward in the way of restoring balance and stability in the market. Pointing out that the economic data are clear and indicate the continuous progress in the market, which is mainly a rapid and significant decline in the level of oil stocks in the world. It pointed out that the economic data are clear and indicate the continuous progress in the market, which is mainly a rapid and significant decline in the level of oil supplies in the world.
The impact of the severe price declines over the past years has been harsh on industry, depleting budgets, and disrupting exploration and production efforts. Public spending on industry has dropped dramatically by 27 percent in 2015 and 2016.
Nearly a trillion dollars worth of investments were frozen and several thousand jobs were canceled in various fields of the industry during the height of the previous economic cycle, which was the most difficult period in the history of the economic cycles passed by the market.
The OPEC Secretary General, Mohamed Barkindo, said that, "Achieving the common objectives of the producers will be in the interest of all parties and stakeholders in all aspects and fields of industry as a whole." He added that, "it will exceed the objectives of producers participating in the declaration of cooperation. And it will benefit the world oil markets, especially in terms of stimulating growth as well as strengthening the state of the world economy, and stimulating the overall development and economic prosperity in various countries around the world."
The report stressed the commitment of OPEC to work with international organizations and the international community to achieve the common goal of protecting the environment in a sustainable manner. It pointed to Barkindo's speech that he has been extensively engaged with many international parties and organizations recently in order to discuss how to meet the world's rapid need for increased energy and secure the full needs of future generations while continuing to work hard in protecting the environment. He stressed that "OPEC" supports the comprehensive implementation of the Paris Agreement on combating climate change. The report stressed the importance of cooperation to reach a global consensus on how the nations of the world can come together to tackle climate change in a fair and equitable manner. He said that, "Hydrocarbon resources will continue to play a key role in our daily lives, and their future will be better. In fact, everyone is well aware that there are important and crucial environmental issues related to carbon emissions from burning fossil fuels. However, it is a sure thing that viable solutions can be developed by using the advanced technology that has the potential to reduce carbon emissions until it is finally eliminated. "
In this regards, the OPEC report stated that we must work to support development with regard to advanced technologies that make reliance on fossil fuels cleaner and reduce harmful carbon emissions broadly, while working more efficiently to expand carbon capture and storage and reuse in innovative ways in the future."
The report noted that the OPEC countries could be considered already active in the use of these new technologies, and expected to become increasingly dependent on them in the coming years. So, OPEC considered continuing in giving priority to environmental promotion, which will enhance the future reliance on crude oil, both in the areas of production or consumption.
