Resta says thousands of new oil wells are needed to meet global demand

According to a report on the OE website on June 2nd, Rystad Energy, an Oslo-based consulting firm, said last Friday that even if global demand drops sharply in the middle of this century, it will still require thousands.

The company's analysis is in sharp contrast with the conclusions of the International Energy Agency (IEA).

The IEA predicts that by 2050, daily oil demand will fall to 24 million barrels, while Resta is expected to fall to 36 million barrels.

The consulting firm stated in a report that given that the average annual output of oil wells has fallen by more than 20%, the international oil industry still needs to drill thousands of new oil wells in existing oil fields and develop about 900 new oil fields at the same time, with a total resource of about 150 billion.

Resta said that in order to achieve a crude oil supply of about 10 million barrels per day in the 2030s, measures need to be taken because its forecasted demand decline rate is slower than that of the IEA.

He added that even if oil demand remains at 36 million barrels per day in 2050, it should be possible to achieve the goal of keeping the temperature rise within 1.

Resta’s analysis may be welcomed by oil companies and oil-producing countries, such as Norway, who question the IEA’s analysis because the IEA’s analysis undermines the industry’s reasons for continuing to produce oil in the medium term.

OPEC has said that insufficient investment in new projects may lead to more unstable oil prices.

　　Hao Fen translated from OE

　　The original text is as follows:

　　Thousands of New Oil Wells Needed to Meet Demand, Rystad Says

　　Thousands of new oil wells and hundreds of new oilfields will be needed to meet global demand even if it falls sharply towards the middle of the century, Oslo-based consultancy Rystad Energy said last Friday.

　　Its analysis stands in sharp contrast to the conclusions of the International Energy Agency (IEA), which said [in May] that investors should not fund new oil, gas, and coal projects if the world wants to reach net-zero emissions by mid- century.

　　The IEA's scenario sees oil demand declining to 24 million barrels per day (bpd) by 2050, while Rystad sees oil demand falling to 36 million bpd by the same time.

　　"Given that output from oil wells declines by an average of more than 20% per year, the international oil industry will still need to drill thousands of new wells in existing fields, as well as developing around 900 new oilfields with collective resources of about 150 billion barrels of oil," the consultancy said in a note.

　　Most of these projects were expected to be redevelopment, extensions, or tie-backs to existing platforms,

　　meaning the required investments will be moderate as existing infrastructure is reused, it added.

　　Rystad said developments were needed to deliver about 10 million bpd in the 2030s, as it saw a slower fall in demand than the IEA, which the consultancy said was overestimating the impact of biofuel growth and behavioral changes.

　　Even if oil demand remains at 36 million bpd in 2050, it should be possible to reach the target of limiting the temperature rise to 1.

　　Rystad's analysis is likely to be welcomed by oil companies and oil-producing countries, such as Norway, which have questioned the IEA's analysis as it undermines the case for the industry to carry on producing oil in the medium term.

　　The Organization of the Petroleum Exporting Countries (OPEC) has said a lack of investments in new projects could lead to more volatile prices.