RIYADH, 7 January — Several OPEC countries including Saudi Arabia have the resources to cover incremental global oil demand, projected to increase by 1.9 percent annually, according to the latest issue of the World Energy Outlook published by the International Energy Agency.
At this rate the world's oil needs will rise to 115 million barrels per day by 2020.
"There is little argument that the Middle East OPEC countries -- Saudi Arabia, Iran, Iraq, Kuwait, the UAE and Qatar -- have the resources to fulfill the growing oil demands, but the key will be for them to attract sufficient, sustained and timely capital investment," said the Outlook, the authoritative source for energy projections of the world's energy future.
Saudi Arabia has consistently ruled out foreign investment in oil prospecting or production saying that it is only seeking downstream investments. The Kingdom has more than a quarter of the world's recoverable oil reserves at around 263 billion barrels. In the years to come more oil is likely to be found in the Kingdom than anywhere else.
As well as this enormous oil reserve base, Saudi Arabia's cost of production is one of the lowest in the world. "Today, our all-inclusive cost of production is less than $1.50 per barrel, while the global average cost is about $5 per barrel and in some areas more than $10 per barrel," Minister for Petroleum and Mineral Resources Ali Al-Naimi is quoted as saying.
"We also have a great advantage when it comes to adding new reserves or increasing production capacity," he said. It costs Saudi Arabia less than 10 cents per barrel to discover new reserves, whereas elsewhere it can be as high as $4. Oil currently accounts for about 35 percent of the country's gross domestic product and 75 percent of the state income.
Saudi gas reserves total six trillion cubic meters. The Kingdom has expressed hopes to attract $100 billion in energy investment for which a dozen of international oil majors made a series of proposals late last year.
The OPEC member countries in cooperation with the Kingdom would have to add an additional volume of crude oil estimated at one million bpd annually for period 2000-2010, rising to 1.4 mbd annually over the period 2010-2020 in order to meet such growth in demand. Thus, OPEC production has to expand from current level of around 30.5 mbd to around 41 mbd and 55 mbd by 2010 and 2020 respectively.
These figures clearly demonstrate that OPEC membeke major additional responsibilities in future in order to meet increasing world demand, said the journal, which has examined energy demand and supply for 13 world regions up to 2020.
The journal views the world oil-resource base as adequate to meet demand over the projection period up until then. "Although oil fields in some regions are maturing and their production will start or continue to decline, the resource base of the world as a whole is not a constraining factor," the Outlook said, adding that these resources will need significant and sustained capital investment particularly in OPEC countries of the Middle East.
Referring to the primary sources of energy, the journal said that the oil would remain the dominant fuel in the primary energy mix with a share of 40 percent in 2020. This is because of the 1.9 percent annual growth over the projection period. The volume of world oil demand is projected at close to 115 million bpd in 2020, compared to 75 mbd in 1997.
It said that the population growth also had a strong impact on the size and composition of energy demand. The world's population will rise from six billion today to 7.4 billion in 2020 and that the share of the world's population living in developing countries will increase from 77 percent today to 81 percent during this period.
