The global oil industry will see pressure on the supply side in three to four years because of a huge drop in investments in the last couple of years, Total chairman and CEO Patrick Pouyanné has said.
The industry invested around $700bn in 2014 globally, which this year will drop to $400bn. More importantly, last year the oil industry only sanctioned two new projects worldwide.
“There is nothing so far this year,” Pouyanné told reporters in Doha yesterday.
He said declining investments would obviously impact global oil production.
“In this industry, if we don’t invest, there will be a natural decline in production. If no new projects are coming on stream, there will be a natural decline in production,” Pouyanné said.
The “impact” of declining investments, the Total chief pointed out, would be “felt in three to four years.”
This is because a project takes about three to four years to build.
“In three to four years, there will be a lack of supply - pressure on the supply side,” Pouyanné said.
He said he would not make any projection on the oil price.
“At Total, our job is to create value to our portfolios of business…and add value to Qatar and our shareholders,” Pouyanné said.
Asked whether the supply bottlenecks and the decline in non-Opec production would jack up oil prices again, he said, “There will be a rebalancing in the market, going forward. In 2015, there was extra supply in the market. So, the price was defined by the demand–supply situation. In three to four years, there will be a lack of supply because of low investments in the industry. Lower investments are clearly a result of the low oil price.” He said Total has a large presence and a long history in Qatar. “Qatar is very important for Total. Qatar represents some 10% of our global portfolio.”
Pouyanné said Total is very proud of its “longstanding, 80-year partnership with Qatar, and especially of our cooperation with Qatar Petroleum, including, but not limited to, the development of world-class LNG, refining and petrochemical projects.”
Total began its upstream operations on the Al Khalij oil field in 1991. In February 2014, Total and QP set up a new joint venture to further develop the field over the next 25 years.
Total is the founding partner of Qatargas 1 and owns an interest in Qatargas 2. It is also a leading partner in Dolphin Energy.
Total Refining & Petrochemicals has stakes in both Qapco and Qatofin. Total is a partner in the Ras Laffan refinery and also sells lubricants.
“We have learnt a lot from association with Qatar Petroleum and Qatar. We have also made significant contributions to Qatar and are committed to further supporting Qatar. Tonight, we are celebrating our 80 years in Qatar with our friends here,” Pouyanné said. Page 3
Total chairman and CEO Patrick Pouyannu00e9 speaking to journalists at the Sheraton yesterday. PICTURE: Nasar T K
