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RIYADH: Oil prices rose in early trade on Wednesday after industry data showed a surprise drop in US crude stockpiles, suggesting demand is holding up despite steep interest rate hikes dampening global growth.
Brent crude futures picked up $1.09, or 1.15 percent, to $95.74 a barrel at 07.30 a.m Saudi time, while US West Texas Intermediate crude futures rose $1.19, or 1.35 percent to $89.56 a barrel.
Oil investment lag sowing seeds for future energy crises: Al-Ghais
The world must act swiftly to invest in oil to prevent future energy emergencies as global demand for hydrocarbon grows in the long term, Haitham Al Ghais, the secretary general of the Organization of Petroleum Exporting Countries, known as OPEC, said on Tuesday.
“If we don’t get it right this time we are sowing the seeds for future energy crises — not just one, but multiple,” he told Reuters in an interview.
Al Ghais sounded a note of optimism that policymakers at the upcoming COP27 climate summit will be more open to hearing the oil industry’s point of view on the climate change debate.
He was speaking a day after the organization released its 2022 World Oil Outlook which estimated that $12.1 trillion were needed in investments to meet rising oil demand in the long term.
Of the total, $9.5 trillion would be for exploration and production, or upstream, investments, he said.
“It is critically important for the future because of the time it takes for investments to come online.”
“The average annual decline rates are around 4 percent-5 percent so you are talking about needing to add 5 million bpd just to maintain today’s global production, let alone future demand,” Al Ghais said.
“We are already falling behind that and feeling the implications on a wider scale.”
The OPEC forecast, which saw demand for oil plateau by 2035, put demand at 109.8 million barrels per day by 2045.
Rosneft says BP should return to Russia
Russian energy giant Rosneft said on Tuesday that international major BP should rethink its decision to leave Russia and return to its operations in the country, promising more dividend pay-outs.
Rosneft’s CEO Igor Sechin said last week that BP is entitled to $700 million in second-half 2021 dividends, which Rosneft transferred into special “C” accounts in Russia, while BP remained Rosneft’s “shadow” shareholder.
Many Western companies, including oil majors, have left Russia since Moscow sent its armed forces into Ukraine on Feb. 24.
Rosneft accounted for around half of BP’s oil and gas reserves and a third of its production.
“We can only heartily advise our colleagues from BP to remove the issue of exiting assets in Russia from the agenda and return to their native bosom,” Rosneft said.
Rosneft also said its board will discuss payment of nine-month 2022 dividends later this month and BP may “increase its earnings from the Russian business by another around $700 million.”
Libya NOC chief says oil output 1.2mbpd, expects no disruption
The head of Libya’s National Oil Corp. said on Tuesday that oil output had risen to 1.2 million barrels per day from 600,000 bpd three months ago and that NOC does not expect any disruption in oil production.
Speaking at the Abu Dhabi International Petroleum Exhibition & Conference, NOC Chief Farhat Bengdara said that “there is an understanding that oil should not be used as leverage for political gains.”
In an interaction with CNBC Arabia, Bengdara said that Libya’s oil production is expected to reach 3 million bpd within the next two to three years.
He further noted that the idea of a pipeline project to connect with Greece and another line to the Egyptian city of Damietta is being studied, in addition to the existing line linking Libya to Italy.
(With input from Reuters)