Saudi Aramco’s CEO Amin Nasser told an audience at CERAWeek in Houston on Tuesday that to keep pace with expected growth in demand and make up for declining fields, the gas and oil industry needs to spend $20 trillion over the coming 25 years. Baker Hughes General Electric Twitter photo.
Oil industry must “push back on the idea that the world can do without proven and reliable sources”: Nasser
Saudi Aramco’s Chief Executive Officer, Amin Nasser told an audience at CERAWeek in Houston that the gas and oil industry must invest over $20 trillion in the coming 25 years to keep pace with expected demand growth and compensate for natural decline in developed oilfields.
Nasser told the Houston crowd that the oil industry had already lost $1 trillion in investments since the price of oil tanked in 2014 and into 2016.
According to Reuters, Nasser said new investments “will only come if investors are convinced that oil will be allowed to compete on a level playing field, that oil is worth so much more, and that oil is here for the foreseeable future.”
He added “That is why we must push back on the idea that the world can do without proven and reliable sources. We must challenge mistaken assumptions about the speed with which alternatives will penetrate markets.”
Nasser said that about 99 per cent of passenger vehicles on the road today are powered by internal combustion engines, including hybrid vehicles. As well, electricity required for battery-powered vehicles comes from power generation, which in large markets like India and China, is still dominated by coal-fired plants.
Even with the growth of EVs, increasing demand from petrochemical markets over the next two decades will only be met if investments are made in the gas and oil industry. Nasser says even with “conservative estimates”, demand is expected to rise by about 20 million barrels per day (b/d) in the next five years.
Even with oil price volatility and forecasted rising shale production, Nasser says he is confident that oil market fundamentals and future demand growth will be healthy.
Nassers comments at CERAWeek come at a time when Saudi Aramco is proceeding with plans for an IPO, but he did not commit to a timeline for the public offering.