Taiye Odewale Abuja Global oil and gas exploration and production spending fell by over $300 billion in 2015 and 2016, according to the Organisation of the Petroleum Exporting Countries (OPEC). Secretary-General of OPEC, Sanusi Barkindo, nwho is on a four-day working visit to Nigeria, disclosed this at the just-ended International Petroleum Week in London, He said that the global oil and gas exploration and production fell by around 26 percent in 2015 and a further 22 per cent drop in 2016.
“Th e gravity of the sharp contraction in oil industry investment is underscored by the fact that in both 2015 and 2016 we witnessed a dramatic rationalisation of projects. “Global oil and gas exploration and production spending fell by around 26 percent in 2015 and a further 22 per cent drop in 2016.
Combined, this equates to above $300 billion. Th is has impacted new projects coming on-stream and new discoveries too,” he said. Barkindo noted that stability in the petroleum industry is vital for stability in the future, given that the oil industry is very much a medium- to long-term business. “Moreover, the industry remains a growth business.
We see the world requiring more oil in the years ahead. Oil will remain a fuel of choice for the foreseeable future,” he argued. He projected that total OECD commercial oil stocks would drop further in 2017 due to the cooperation between OPEC and non-OPEC member countries as regards output cut. He argued that the decisions reached by OPEC and nonOPEC members would also mean that prices stabilise at levels that are more conducive to the kind of investments the industry needs, specifi cally by lessening the fi nancial and operational stresses for companies and reducing the pressure to cancel or postpone planned projects. He expressed optimism that as the market stabilises the prices of crude oil would fi nd its equilibrium. “We are also determined to realise the joint conference decision to strengthen and sustain this cooperation between OPEC and non-OPEC. “We want this to be a lasting and fl exible partnership that when necessary can help reduce volatility, provide more confi dence to the market, and steer a path towards more sustainable stability,” the OPEC Secretary General explained.
He said stakeholders would continue to focus on the level of inventory drawdown to bring the level closer to the fi ve-year industry average. According to him, in the short term, the cooperation between OPEC and non-OPEC, given recent indications of improved macroeconomic conditions, would see the rebalancing process brought forward and more stability return to the market. Barkindo noted that the shuttle diplomacy that was undertaken across the world and the encouraging and consistent advocacy in a variety of international energy platforms and fora, facilitated consensus and commitment, which according to him, was crucial in the adoption of the ‘Vienna Agreement.’
