Oil Industry’s Upstream Spending Dropped By 30% In 2020 – Barkindo
Meanwhile, the Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Sanusi Barkindo, has said that the cartel’s latest assessment shows that capital investments in the upstream of the oil and gas industry fell by 30 per cent in 2020.
He said at the first meeting of the OPEC-Africa Energy Dialogue that despite that, crude oil will continue to be relevant, especially in Africa.
Describing the future of Africa’s oil industry as bright and the opportunities vast, Barkindo stated that the continent is currently home to five of the top 30 oil-producing countries in the world.
According to him, oil is expected to retain the largest share of the global energy mix throughout the forecast period, providing nearly 28 per cent of global requirements in 2045, followed by gas at around 25 per cent and coal at roughly 20 per cent.
In 2019, Barkindo stated that the continent produced 8.5 mb/d of oil, which is around nine per cent of world’s output.
He said at the end of 2019, Africa was estimated to have proven oil reserves amounting to around 126 billion barrels,with Nigeria holding the lion’s share with 36.9 billion barrels, representing 29 per cent of Africa’s reserves.
Barkindo said demand in developing regions, including Africa, with its rapidly growing population and dynamic demographical shifts, would be intensified, and all forms of energy would be needed, not only to support the post-pandemic recovery but to satisfy long-term energy requirements.
“One major issue looming in the long-term horizon is the lack of adequate industry investment.
“According to our latest assessments, upstream capital spending is estimated to have fallen in 2020 by a staggering 30 per cent or more.
“Our 2020 World Oil Outlook estimates that $12.6 trillion will be required between now and 2045 in the upstream, midstream and downstream.
“We must continue to advocate a turnaround in this very upsetting trend. The very future of our industry is at stake,” he stated.
According to him, oil and gas will continue to be a vital part of the energy needs to ensure future demand is met, adding that policies must change in that regard.
He stated that another issue of utmost concern in Africa is the scourge of energy poverty, which continues to impact millions across the continent.
Citing OPEC data, Barkindo said an estimated 47 per cent of the population in Sub Saharan Africa had no electricity and approximately 85 per cent of people lacked access to clean fuels and technologies for cooking.
He stated that considering the richness of the continent’s resources, both conventional and renewable, this situation is hard to accept.
He urged all stakeholders to unite on the issues to ensure an equitable distribution of energy that leaves no one behind.
“When all is said and done, access to energy, like education and health care, should not be considered a luxury but a human right.
“OPEC will continue to work closely with our member countries to advocate for real and lasting change on this issue,” he added.
