Implications for the Oil and Gas Industries

The purpose of this panel is to identify implications of the papers and discussions of the past two days on the oil and gas industry. We heard that oil is being produced by unstable countries that cannot assure security of supply for a strategic commodity, and that it causes environmental degradation. However, the public needs a more balanced picture when the question of future energy supplies is being discussed. The world oil industry is meeting a huge task today. It produces around 82 million barrels a day (mn b/d), with a large part of it serving the transportation sector. There are today more than 500mn vehicles on the road worldwide.

Replacing oil, or substituting other sources of energy in its place, will need more than what today’s technologies can provide, and at much lower cost. Gas-to-Liquids (GTL), for example, is not forecast to grow more than 500,000 b/d by the end of decade. Moreover, demand for oil is not static. It is, in fact, rising by 1.5–2.0% annually. Global demand is forecast to reach 120mn b/d at the end of the next decade. In order to produce the 82mn b/d and to find new oil to substitute for what is being consumed and to meet future demand, the world oil industry invests around $100bn annually on exploration alone.