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September 2017 TUBE PRODUCTS INTERNATIONAL
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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.