ABUJA: The oil and gas industry is facing huge challenges on multiple fronts and is “under siege” due to years of underinvestment globally that has led to market tightness, Mohammad Barkindo, the OPEC secretary-general, said on Tuesday.
“Our industry is now facing huge challenges along multiple fronts,” he told delegates at an energy conference in Nigeria’s capital.
“And these threaten our investment potential now and in the long term, to put it bluntly, my dear friends, the oil and gas industry is under siege,” he said, citing geopolitical developments in Europe.
The fallout from the war in Ukraine has left many countries globally vulnerable to soaring energy prices.
He said the supply shortage could be eased if extra supplies from Iran and Venezuela were allowed to flow.
Years of sanctions have limited supplies from Iran and Venezuela.
In addition, the West has imposed sanctions on Russia, a member of OPEC+ that groups the Organization of the Petroleum Exporting Countries and allies, following Moscow’s invasion of Ukraine on Feb. 24, tightening oil markets further.
“We could, however, unlock resources and strengthen capacity if the oil produced by the Islamic Republic of Iran and Venezuela were allowed to return to the market,” Barkindo said.
Strain on the industry has been increased by some countries' efforts to divest from hydrocarbons, he said.
While they are seeking to limit global warming, he said oil demand was growing even as investment in capacity falls and prices surge.
Nigeria’s Oil Minister Timipre Sylva said Africa’s top oil producer would not abandon fossil fuels.
“For us in Nigeria, fossil fuel will always have a share in our energy mix, for the foreseeable future. We will not at this time abandon fossil fuels. We have adopted ... gas as a transition fuel,” he said.