UPDATE 2-Total CEO says must act fast to meet future oil demand
* Energy companies need to act fast on investment decisions
* Current oil prices enough to encourage project investment
* Oil market well balanced
(Adds quote on regulation and investment)
By Simon Webb and Reem Shamseddine
KUWAIT, April 26 (Reuters) - Energy companies have no time to lose in making the necessary investments to keep supplying the world with enough oil and gas to meet future demand, Total's chief executive Christophe de Margerie said on Monday.
Oil and gas producing countries and companies put many projects on hold when energy demand fell during the global economic downturn.
With demand expected to rebound in 2010 from two years of contraction, those projects need to get back on track to prevent future shortages, de Margerie said.
"There is no time to waste before we restart investing," he told an industry event in Kuwait.
Oil prices would need to stay where they were to maintain energy industry capacity, he said. Prices at $80 to $85 per barrel were sufficient to encourage project investment in the sector.
If demand rose strongly, the price would have to rise close to $100 a barrel to encourage output from higher cost projects, he added.
Governments worldwide would be well advised to ensure that efforts to increase regulations in energy markets did nothing to impede investment and hurt future capacity, he said.
"The priority is to make sufficient energy available for the consumers. Invest, invest, invest," he later told reporters on the sidelines of the event. "The best way to control the price is to invest." Total expected oil demand to rise by around 1 million barrels per day (bpd) annually through 2020, he said.
Huge investments would be needed to meet that demand and also to counter decline in output from existing fields of around 6-7 percent per year, he said.
"If emerging countries continue to grow the way they are, we will be short definitely not of reserves but of capacities," he said.
Much of new demand was coming from Asia, while demand in developed economies was likely to remain weak for years to come, he said.
That was changing the nature of the oil and gas sector and its trading patterns, he said.
"It is changing relationship, changing partnerships, and changing the way we behave," he said. "The world is changing from west to east in terms of demand."
At present, the oil market was well supplied and balanced, de Margerie said. (Editing by William Hardy)
- Tweet this
- Share this
- Digg this