Oil E&P cost to hit $1trn by 2017, says Pareto
Pareto analyst Andreas Stubsrud believes the level of global investment in oil exploration and production will hit $1trn annually by 2017.
He made the comment at Norwegian financial group’s annual conference in Oslo, reports local newspaper Dagens Næringsliv. The figure would be a near doubling on the current estimate of some $560bn annually.
The sums are being driven by the gap between production and the size of new fields. Since the 1980s global oil production has run ahead of new sources, and in 2010-11 the ratio was close to 2:1.
Oil companies can choose to invest in finding new fields, or developing existing fields to get more oil out of them. Stubsrud prefers the latter, as he said it was a more efficient use of capital, the newspaper reported.
Helge Lund, representing Statoil, agreed with the sentiment. He said that with projections for a global middle class of some 5 billion people in the next 20 years, there will be significant demand for energy, which will drive the oil and gas sectors.