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Statoil’s exploration chief sees oil supply crunch ahead

oil supply

Statoil’s Tim Dodson told the ONS oil conference that as the industry struggles to cope with low oil prices, it is cutting jobs, projects and investments which will likely lead to an oil supply crunch by 2040. Statoil ASA photo by Ole Jørgen Bratland.

Oil supply gap will open up by 2040: Tim Dodson

By Karolin Schaps and Gwladys Fouche

STAVANGER, Norway, Aug 30 (Reuters) – Energy companies are not exploring enough and heading for an oil supply crunch in the coming decades, Statoil‘s exploration chief said on Tuesday.

The industry has been slashing jobs, projects and investments to cope with a 60-percent decline in crude prices since mid-2014, including the exploration needed to find new reserves to replace old ones.

“(With) the current level of investments in the oil and gas sector and given the decline rates of existing fields, (this is) a sign a supply gap will open up by 2040,” Tim Dodson told the ONS oil conference.

“If you take all the fields currently producing in the world, look at their production capacity in 2040 and compare that to how much oil the world will need, what you find is a big gap.”

He said the gap is about 20 times current production from the Norwegian Continental Shelf, which produced 1.57 million barrels of oil per day in 2015.

“If we stand still, the world will just not have enough energy to fuel its growth,” Dodson said.

His comments echoed those of Amrita Sen, chief oil analyst at energy consultancy Energy Aspects.

“We have sown the seeds for a supply crunch in the coming years. There is a risk of a likely sharp spike in oil prices because of a lack of investments,” she told reporters on Monday.

(Editing by Terje Solsvik)

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