A new report by the Organization of Petroleum Exporting Countries (OPEC) indicates the group will be more hard pressed than previously thought...
LONDON — A new report by the Organization of Petroleum Exporting Countries (OPEC) indicates the group will be more hard pressed than previously thought to meet the world’s surging oil needs and could fail to supply its share of global oil markets by 2037.
The report in the December issue of the OPEC Review, published by the organization’s Vienna-based Secretariat, also says Kuwait is likely to be an extremely inconsistent and unstable supplier and questions Saudi Arabia’s assertion it is capable of meeting world oil demand for the next 50 years.
While non-OPEC oil producers like Canada, Russia and others are boosting output, it is assumed that they will be unable to produce enough to meet the world’s rapidly growing appetite for oil. OPEC members, responsible for 40 percent of world oil output, are expected to meet the shortfall and provide most of the increased supply.
Using calculations based on the current proven reserves of 11 OPEC member countries (excluding recent entrants Angola and Ecuador), the study maps out three scenarios, which show OPEC could find itself unable to meet its share of global oil demand by 2048, 2037 or 2024 depending on how quickly its members ramp up output.
- Seahawks made mistake by drafting Frank Clark
- Seahawks gamble with both of their picks
- Blues legend B.B. King in hospice at his home in Las Vegas
- Peaceful rallies give way to May Day clash, injuries on Capitol Hill
- Did she blow? NW submarine volcano likely just erupted
Most Read Stories
The author of the report, Ayoub Kazim, the executive director of Dubai Knowledge Village, a government-run education center, writes that the “more realistic” scenario assumes OPEC’s average oil production will grow annually by 5 percent to meet a “drastic increase in oil demand from industrializing countries, such as China and India, in the next two decades.”
Under that scenario, Indonesia, Algeria and Nigeria will fail to produce their share by 2009, 2022 and 2026, respectively, forcing other countries to make up the difference.
The report emphasizes that Saudi Arabia, as OPEC’s largest producer, is “somewhat vulnerable to future global oil demand” and could find itself running out of enough oil to meet its share of exports before other smaller producers.
Kuwait and Iraq will provide the bulk of OPEC’s share of world oil production of 51.1 billion barrels a year by 2037 at which point the organization will find itself unable to fulfill its commitments, the report said.
A separate scenario with a lower annual average production growth rate of 2.7 percent shows that OPEC could hold out until 2048 before it finds itself unable to shoulder its share of oil supply. The final scenario — based on calculations using the average growth rate of production for each member in the past 25 years — brings the date up to 2024.
The report acknowledges that the projections could be swayed by unpredictable factors, including changes in economic-growth rates in the developing world that could greatly affect oil-demand growth and future exploration that could boost OPEC’s proven reserves.
The study highlighted other findings.
It said across all three scenarios, Kuwait emerged as an “extremely inconsistent and unstable” supplier as a result of its highly erratic production in the past: The country’s annual production growth rate fell as much as 78 percent in 1991 after the Iraqi invasion, then shot up 457 percent in 1992 to compensate, the report said.
The report said the United Arab Emirates is likely to be a more consistent producer less prone to large fluctuations in output.
Indonesia is set to become completely marginalized from OPEC in the next decade “as a result of its failure to produce its required share of oil,” the report added.