Mohammad Sanusi Barkindo, the Organisation of Petroleum Exporting Countries, (OPEC) secretary general, has said the Southern Gas Corridor is changing the energy landscape in a fundamental way.
Speaking at the 25th International Caspian Oil and Gas Exhibition and Conference, Barkindo said the corridor is poised to further enhance and strengthen energy security in an increasingly uncertain world.
The Southern Gas Corridor (SGC) is a term used to describe planned infrastructure projects aimed at improving the security and diversity of the EU’s energy supply by bringing natural gas from the Caspian region to Europe.
It is one of the most complex gas value chains ever developed in the world. Stretching over 3,500 kilometres, crossing seven countries and involving more than a dozen major energy companies, it is comprised of several separate energy projects representing a total investment of approximately US$40 billion.
Speaking further, he said the implementation of the Declaration of Cooperation has halted the worst oil market downturn in history, reversing the decline by enhancing the rebalancing process.
In his words, “the huge overhang of more than 400 million barrels was removed, and thereby using a 5-year average was a useful reference to closely monitor and evaluate the stock levels in a complex global supply and demand equation.
“As the implementation phase continues to advance and we take stock of the successes we have accomplished thus far, we must also step back and consider the larger picture and the perspectives over the medium to long term.
“One of the greatest and most pressing challenges before us is ensuring that there will be adequate levels of investment in a predictable fashion to meet the world’s future requirements.
“So far in 2018, the pace of investment has gradually picked up, yet we are still not seeing enough robust investment in long-cycle projects, which are the baseload of future supply, and the foundation of this industry’s future.
“In the period to 2040, the required global oil sector investment is estimated at $10.5 trillion to meet future world oil demand that is expected to surpass 111 million barrels a day by 2040. This represents a staggering increase of 16 million barrels a day.
“Indeed, the world will attain the 100 million barrels a day level of consumption much sooner than projected,” he said.
According to him, every effort should be made to avoid a potential supply gap that could present a serious challenge to the industry in the medium to long term.
This, he said isessential, not only to maintain current production levels under given natural decline with compensation needs at 4 percent to 5 percent but also to ensure a steady flow of oil to meet rapidly growing demand in the long term.