‘Production capacity sufficient to meet demand for oil and gas’
Petroliam Nasional Bhd (Petronas) is confident that there will be enough production capacity to meet demand for oil and gas in the medium term.
This was despite a significant cut in the industry’s capital expenditure (capex) for the upstream segment, said its president and group chief executive officer, Tengku Muhammad Taufik Tengku Aziz, at the 13th International Petroleum Technology Conference (IPTC 2021) yesterday.
He noted that the industry capex for upstream activities fell below US$400 billion last year.
“During the height of the Covid-19 pandemic last year, close to four billion people were placed under movement restrictions, reducing global oil demand to 91 million barrels per day (bpd). This was a full eight million bpd lower than in 2019.”
Tengku Taufik said many parties suspected that oil demand was unlikely to return to 2019 levels soon despite of the recent observable modest recovery.
“This is due to uncertainty around the pace and scale of recovery, continued restrictions around travel by road and air, and rising efficiency and electrification of the transportation sector,” he said.
The national oil company said the future of oil and gas industry
would be heavily shaped by last year’s unprecedented events.
Tengku Taufik said the energy transition to cleaner and more sustainable energy sources continued at an accelerated pace.
However, he acknowledged that oil and gas would continue to make up a significant portion of the energy mix, although its share would likely decline to around 47 per cent by 2040 from 54 per cent in 2018.
“Renewable energy alone will not be able to meet growing energy demand amid growing populations and economic expansion, which we expect to see in the post-Covid-19 recovery, particularly in Asia,” he said, adding that gas continued to be a vital part of the energy mix.”