December 5, 2008
OPEC Oil Investment Plans On Track ~ For Now
For several weeks now the IEA has given warnings about the prolonged world recession could potentially lead to an uphill battle in underinvestment with energy projects that could lead to a future oil supply crunch if measures are not taken soon. OPEC has continued to do investments but according to the IEA it simply might not be enough and this could be a major issue in the near future.
Some OPEC members are expressing the pressing need that if oil prices continues to stay at record lows then because of the global economic standings there will be the problem with deep-water drilling and sanding for oil. Within OPEC there are budget cuts being made but because of the problems with not enough investments there is also the issue again of money.
Currently IEA states that within OPEC there is little evidence of its largest oil exporters doing any sort of cut backs and only about 10% of the $90 billion earmarked in the Middle East and Africa have been shelved for future use. However there are good things happening the the Middle East, in Africa, and in OPEC and that is because there is a stronger dollar accompained by the fall in crude oil prices this has allowed for more control power in the organization.
Finally the IEA World Energy Outlook recommends that despite the 7 million barrels a day capacity (on top of the already 23 million barrel sanction) there needs to be a middle ground met in order to avoid a supply crunch by 2015. Oil prices are as low as $45 a barrel and gas prices are globally below $6 a gallon, it is hard to tell how and when the investments are simply not enough.
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