Years of underinvestment in oil and gas production are the main cause of the current energy crisis, and when the global economy rebounds from the current downturn, the small oil production capacity available will be wiped out, said Tuesday. Saudi Aramco CEO Amin Nasser. .
“Many of us have been insisting for years that if oil and gas investment continued to decline, global supply growth would lag behind demand, which would impact markets. , the global economy and people’s lives,” said the CEO of the world’s largest oil company. oil exporter said today at the Schlumberger Digital Forum 2022 in Switzerland.
Investments in oil and gas have more than halved between 2014 and 2021, Nasser said, adding that “the increases this year are too small, too late, too short-term.”
In 2014, annual investment in oil and gas was $700 billion, which fell to just over $300 billion last year, Aramco’s top executive said.
“These are the real causes of this state of energy insecurity: underinvestment in oil and gas; alternatives not ready; and no backup plan. But you wouldn’t know from the response so far,” he added, reiterating a long-held Saudi view that the underinvestment of previous years will come back to bite energy supplies. .
“Even with strong economic headwinds, global oil demand is still quite healthy today,” Nasser said.
“But when the global economy recovers, we can expect demand to rebound further, wiping out the little spare oil production capacity. And by the time the world realizes these blind spots, it may be too late to change course,” he added.
“That’s why I’m seriously worried.”
Saudi Aramco again called for more investment in oil and gas, especially capacity development.
“And at least this crisis has finally convinced people that we need a more credible energy transition plan,” the Aramco CEO added.
Saudi Arabia plans to increase its production capacity to 13 million barrels per day (bpd) by 2027, from around 12 million bpd currently, but not much further. The Kingdom is one of only two major oil producers that currently hold additional spare capacity. The other producer is another OPEC member, the United Arab Emirates (UAE).
By Tsvetana Paraskova for Oilprice.com
More reading on Oilprice.com:
