$11.8trn fossil fuel investments required before 2045, says OPEC

The Organisation of Petroleum Exporting Countries (OPEC) has said not less than $11.8 trillion investment is required till 2045 to keep crude oil and gas exploration and production in place.

OPEC’s Secretary-General, Sanusi Barkindo, made the disclosure at the Nigeria Energy Forum held organised by Energy and Corporate Africa alongside the CERAWeek in Houston.

This was even as he called for cautious optimism over energy transition warning that the continuous push against hydrocarbon carbon may threaten the future of crude oil and gas reserves in Nigeria and other African countries.

“In OPEC’s most recent World Oil Outlook, we see Energy demand expanding by 28 per cent in the period to 2045. Global oil demand reaching 108.2 mb/d by 2045. And cumulative oil-related investment requirements alone amounting to $11.8 trillion in the 2021-2045 period. When considering the scale of the energy transition, we must harness all available energies.

“In terms of providing reliable and secure supplies, and from the perspective of reducing emissions, the oil and gas industries have much to offer. This includes some of the world’s most cutting-edge technologies and advanced innovations, which can all be leveraged to promote a lower carbon future,” he said.

While Africa has about 125 billion crude oil reserves and 16 trillion standard cubic meters of natural, Barkindo worried that the mounting pressure to abandon oil and gas could affect the production of the reserves.

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Barkindo said discussions on climate change and energy transition is more of emotion than fact.

“This is wrong. Rational discussions need to be based on facts, hard data and science and include all stakeholders. Additionally, we are witnessing investors, environmental lobbyists and even some corporate boards pressuring oil and gas companies and governments to pursue increasingly radical policies and initiatives that could, in the end, be more disruptive, than productive, for the global energy industry,” Barkindo said.

While the need for net-zero remained critical according to him, the massive challenges for developing countries like Nigeria must be put in context, considering the energy poverty on the continent.

Barkindo said: “We need to continually keep in mind that access to affordable, reliable, sustainable and modern energy, is a right for all, not a privilege of the few, and is enshrined by the UN in Sustainable Development Goal 7.

“The unfortunate reality for developing countries is that a staggering 759 million people worldwide did not have access to electricity in 2019, with around 79 per cent of them located in Africa.”

The OPEC boss noted that the energy poverty numbers for Africa are stark, stressing Africa alone accounts for less than 3 per cent of global emissions.

“We also need to remember in the energy poverty debate that the continent of Africa is still relatively unexplored in terms of oil and gas, bestowed with approximately 125 billion barrels of proven oil reserves and 16 trillion standard cubic metres of natural gas.

“The capacities and national circumstances of developing countries must be taken into account in all actions,” he said.

He warned that Africa could be hit by more challenges, as the countries are currently struggling with their economies.

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$11.8trn fossil fuel investments required before 2045, says OPEC