Gulf States should take long term view of energy demand
The United Arab Emirates and other Gulf states should continue to take a long-term view of the energy sector and not allow themselves to become distracted by demand security concerns driven by the soaring price of oil, say industry experts speaking on the sidelines of the International Petroleum Technology Conference (IPTC) taking place in Dubai this week.
The event was formally inaugurated by Sultan Bin Saeed Al Mansoori, Minister of Government Sector Development, United Arab Emirates, in a ceremony attended by Tony Hayward, Group Chief Executive, BP, as well as a number of senior executives and government representatives.
A running theme throughout the Conference – which features more than 250 technical papers – is the importance of positioning the industry to ensure sustainable development.
Keynote speaker Daniel Yergin, Chairman of Cambridge Energy Research Associates (CERA), has said that continued investment is absolutely critical to the long-term stability of the industry. “People, equipment, and skills shortages have doubled upstream production costs in the last three years alone,” said Yergin.
“Contraction in the industry from 1986 to 2000 lead to a draw down of resources, but, since 2003, the industry has been running hard just to keep up. Investment now will bring increased stability to the sector in the near term,” he added.
Yergin said earlier this year that oil prices had become decoupled from supply and demand due to external factors, namely the weakening US dollar but also the resulting tendency to use oil as a hedge against the weakening dollar.
Part of the discussion at the event has focused on potential responses to the Cambridge Energy’s “breakpoint scenario” that could result from the current climate, where oil supply difficulties limit production growth, leading to sustained high prices and a significant market response toward alternative fuels and technologies. In this scenario, rising concerns about energy security promote moves toward major changes in energy policies.
An alternative development path could be the CERA’s “Asian Phoenix scenario,” where the centre of global economic and political gravity shifts to Asia, changing the global strategic and business environment. In this scenario, the growing share of global economic output attributed to nation-states like China and India is matched by their share of total world energy consumption.
Other panellists at the event have examined the requirements of the new generation of billion-dollar projects in the exploration and development sector, which will be essential in meeting energy needs in the future.
Speakers from a diverse range of major companies – including Saudi Aramco, Total S.A, BP and ExxonMobil – discussed their own experiences in this field.
Bringing together the world’s four largest representative bodies of exploration and production professionals – The Society of Petroleum Engineers (SPE), the European Association of Geoscientists and Engineers (EAGE), the Society of Exploration Geophysicists (SEG), and the American Association of Petroleum Geologists (AAPG) – the event is a truly international gathering of energy professionals.