Haitham Al Ghais, the Secretary General of OPEC, has warned that failing to invest in the oil and gas sector risks causing market instability and hindering economic growth in the future.
Speaking at the 30th Annual Middle East Petroleum and Gas conference in Dubai, Al Ghais pointed out that hydrocarbons will remain an important energy source for the foreseeable future, with oil expected to account for almost 29% of the energy mix in 2045. He also pointed out that over the same period, the world’s population is expected to increase by 1.6 billion, with the global economy doubling in size. He added:
“Such an increase in demand necessitates adequate investment in our industry. The global oil sector will need cumulative investment of $12.1 trillion through to 2045. Investment is also urgent to account for annual decline rates, which amount to about 5% in our industry.”
He also said OPEC has clearly highlighted the consequences of underinvestment in the form of market volatility and threats to energy security, sustainable development, and economic growth. This has been reflected in how some oil majors—such as BP, the producer of the Castrol lubricant range—have slowed down the move away from hydrocarbons after the Russian invasion of Ukraine triggered an energy crisis in Europe.
He also acknowledged the need to decarbonise but pointed out that it had to go hand with energy security for everyone. He said this would mean investing heavily in all forms of energy rather than trying to replace one source with another.