Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: jim_p who wrote (69527)	7/12/2000 8:02:00 PM
From: Tomas	Read Replies (1) of 95453

Outlook for world energy demand, supply and investment William Ramsey, Deputy Executive Director of the International Energy Agency, comments on the outlook for global energy demand, supply and investments in the next two decades. (Source: Bloomberg Energy, July 11) Energy demand is expected to go up by 4.1% annually, fuels 3.9%, oil 3.6% and gas at 5.5%. Asian energy demand will triple during the period 1995-2020 and 90% of that growth will be fueled by fossil energy. 65% of increased oil demand will be for transportation as demand for transport services triple. Oil demand will increase 41.5 million barrels per day in the next 20 years to 111.5 million barrels in 2020. If you take just the Middle East OPEC countries expanding capacity from 21 million barrels per day to 46 million barrels a day by 2020, that's a capital requirement of $75 billion just for expanding that capacity. If you extend that to the world, we can estimate $280 billion to add the 41.5 million barrels to the existing capacity and probably a like amount to sustain the existing capacity. About 50 million barrels a day of oil would be coming from Persian Gulf in 2020. World thirst for oil is being challenged by growing interest in gas. The world is using 8 trillion cubic feet of gas a year now. We're going to need another 7 tcf by 2020 during which time Asian demand is going to be quadrupling. If you think security of supply is a problem with oil, I suspect the bigger surprise will be gas. Typically gas pipelines are more vulnerable than oil moving around in tanks. Fifty percent of world's gas reserves are in Russia and the Middle East. Cost of incremental capacity in power generation and transmission required around the world in the next 20 years (could be) between $1 trillion and $1.25 trillion between 1995 and 2020. Again China's is the largest growth market. You got a pretty tremendous capital requirement for next 20 years and I'd suspect the competition for that capital will be every bit as intense.

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