TPi September 2017

will quadruple over the next 20 years, and carbon emissions will grow at less than a third of the rate of the past 20 years as coal consumption declines. As demand for coal reduces, the contribution of gas in our transition to lower carbon energy use will be significant. Projections for the primary energy mix indicate that oil and gas will continue to remain the dominant energy source, despite the rise in renewables. But the current and short-term lack of investment in the industry is, and will, make an impact. McKinsey & Company suggested that capital expenditure in global oil production had fallen more than 60 per cent in the past two years. The International Energy Agency (IEA) predicted non-OPEC oil supply could have declined by as much as 500,000 barrels per day (bpd) in 2016 because of a reduction in capex. Such a drop would represent the biggest annual fall in 24 years. Without greater investment, production from mature oil fields will decline by around 9 per cent per year on average, according to the IEA. In a world where oil prices are expected to average $50 to $70 per barrel over the next few years, actual decline rates could easily reach 3 or even 4 per cent a year. Investment decisions to develop just eight billion barrels of oil were taken by oil companies in 2015 – less than a quarter of the oil output that needs to be replaced every year from new projects, according to Rystad.

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September 2017 TUBE PRODUCTS INTERNATIONAL