Abu Dhabi: Close to $20 trillion (Dh73.44 trillion) will be needed to build the global oil and natural gas infrastructure to meet expected energy demand in 2035, Abdullah Bin Hamad Al Attiyah, president of Qatar's Administrative Control and Transparency Authority, said in Abu Dhabi yesterday.
"On a standalone basis, Mena [Middle East and North Africa] region will be asked to invest over $100 billion every year," said Al Attiyah, a former Qatar energy minister, in his speech at an industry conference.
"Future production levels will be determined by the investment decision we make in the present. As such, we need to ensure that the industry has a stable business environment that will give them the confidence to make large-scale investments," Al Attiyah said, adding that a close and loyal relationship between the national oil companies and international oil companies is a requirement to ensure success in multi-billion dollar projects spread over many years.
He said that despite the macro-economic imbalances in Europe and the US and the threat to global economic growth, the energy demand will continue to grow rapidly under the leadership of emerging economies, especially China and India.
"According to the International Energy Agency, energy demand in Asia will almost double by 2035, while consumption in the OECD [Organisation for Economic Co-operation and Development] will remain almost constant, Non-OECD countries lead the growth in energy consumption," Al Attiyah said.
He added: "Their rapid economic development is expected to outweigh energy efficiency gains resulting in an overall increase in energy demand. At the same time, even though hydrocarbons remain the dominant source of energy, the energy mix gradually shifts away from oil and coal, while natural gas and renewable energies gain market share."
If oil trades between $85-$95 per barrel range over the next decade, it will provide an adequate economic incentive for producers such as the UAE to continue investing in long-term sustainable production capacity, energy minister Mohammad Bin Dha'en Al Hameli said during an energy conference in Abu Dhabi yesterday.
"Indeed, in recent years the UAE has invested heavily across the hydrocarbon value chain and these investments are continuing," Al Hameli said. "However, these investments will materialise only if price levels are sufficient to justify commercial production from complex reservoirs," he added.