Consultations among OPEC and non-OPEC producers will continue, affirms OPEC chief

 Consultations among OPEC, as well as non-OPEC producers, will continue in the coming weeks, with another meeting set for later this month, OPEC chief announced in Abu Dhabi on Monday.

''We believe it is vital that OPEC and non-OPEC producers come together and take coordinated and timely action to rebalance the market, for the common good of all. Our industry works best with collaboration, cooperation and consensus,'' said Mohammad Sanusi Barkindo, OPEC Secretary-General, in his keynote address at the opening of the 2016 Abu Dhabi International Petroleum Exhibition and Conference.

He said that OPEC had been undertaking intensive consultations over the past few months about how best to return stability to the market.

''As this event highlights, there are many reasons why we should be optimistic about the industry’s future. It is clear that oil and gas will continue to be fuels of choice. And I have no doubt that through innovation, human ingenuity and technology, the industry will be able to continually transform itself to overcome the challenges it faces, and unlock the many opportunities before it in the years ahead,'' he added.

''Of course, the current oil market is a challenging environment. However, as I have been witness to over the past couple of months, and I am sure will be readily apparent here at ADIPEC, the best way forward is for all industry stakeholders to continually dialogue and work towards achieving more stability for our industry.

''This is not only in the short-term, but in the long-term as well. This will help us deliver a sustainable energy future; for all producers and for all consumers too,'' he affirmed.

Looking to the future, he stated, the 2016 World Oil Outlook sees global oil demand increasing from around 93 million barrels a day in 2015 to over 109 million barrels a day by 2040. And from the perspective of natural gas, demand increases from close to 350 billion standard cubic feet a day in 2015 to 590 billion standard cubic feet a day in 2040.In fact, oil and gas are still expected to contribute 53 per cent to the global energy mix by 2040.

''Of course, all this will require huge investments with new barrels needed to not only increase production, but also to accommodate for decline rates from existing fields. Estimated oil-related investment requirements are close to $10 trillion in the period to 2040. And from the perspective of gas, the number is around $6 trillion,'' he said.

''OPEC Members are committed to invest in existing and new production capacity. They remain unswerving in their commitment to meeting the future requirements of consumers in a timely and sustainable manner,'' he stressed.

''At the global level, however, the situation that has evolved over the past two years or so is putting this future at risk given the dramatic drop off in investments. Global oil and gas exploration and production spending fell by around 26 per cent in 2015 and a further 22 per cent drop is anticipated this year. Combined, this equates to above $300 billion.

If market and financial conditions do not improve, he warned, there is the distinct possibility that ''we could see a third year of investment cutbacks. To put this into some oil industry context, there has never been a consecutive three-year decline in its history.

''This is a major concern for an industry that needs regular and predictable investments to provide the necessary supply in the medium- and longer terms,'' he noted.