IEA's Birol says oil investment of $10 trillion needed over 2011-2035
Paris (Platts)--18Oct2011/743 am EDT/1143 GMT
The world needs to invest a total of $10 trillion between now and 2035
to meet future demand, $2 trillion more than projected a year ago, the
International Energy Agency's chief economist, Fatih Birol, said Tuesday.
Birol said this year's World Energy Outlook, which will be released in
November, sees a need for total energy investment of $38 trillion over the
period to 2035, around half of which is needed for oil and gas and half for
This means an annual investment requirement of around $1.5 trillion over
the period, Birol told a news conference in Paris on the sidelines of the
IEA's annual ministerial meeting.
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"Oil and gas are the key areas for investment," Birol said.
The agency is forecasting an investment requirement of $9.5 trillion for
natural gas, $16.9 trillion for power, $1.1 trillion for coal and $0.3
trillion for biofuels.
Key to meeting future demand will be investment in the Middle East and
North Africa, "because about 90% of [production] growth in the next 10 years
needs to come from MENA," Birol said.
"And if it doesn't come through it will have major implications for oil
prices," he said.
"We shouldn't forget that in many producing countries production is
declining," Birol said, stressing the need to compensate for these declines.
But Birol also said there were "some signs of reluctance" to carry out
the necessary investment, which could mean "much higher prices than we see
He declined, however, to say how high prices might rise if there was not
enough investment to meet future needs.
Birol said he would be surprised if Libya managed to restore its oil
production to levels seen before the uprising against Moammar Qadhafi before
"We are still looking at Libya," he said. But, he added, "I would be
positively surprised if we see pre-war levels reached before 2013."
Top Libyan officials have said in recent weeks that they expected to
restore crude production to pre-uprising levels of around 1.6 million b/d
within 15 months.
The IEA said in its latest monthly oil market report on October 12 that
it now expected Libyan production to recover to around 600,000 b/d by the end
of this year, having upwardly revised its previous projection of between
350,000 b/d and 400,000 b/d by end-2011.
"So far, production is made up of relatively easy barrels from fields
unaffected by the fighting but thereafter restoring production may be more
difficult as companies implement repairs to war-damaged fields, terminals and
other key infrastructure," the IEA said at the time.
--Margaret McQuaile, email@example.com
--Kate Dourian, kate_Dourian@platts.com