07 June 2010 06:52 [Source: ICIS news]
KUALA LUMPUR (ICIS news)--Malaysia's Petronas president Shamsul Azhar Abbas said on Monday that the oil and gas industry must reverse the energy investment cutbacks totalling $170bn (€143bn) quickly to prevent future oil supply shortfall.
The amount involves some 2m bbl/day of peak oil capacity and about 1bn cubic feet/day of peak gas capacity, representing the shut-in or delayed investment in the upstream sector, he said at the 15th Asia Oil & Gas Conference (AOGC) held in ?xml:namespace>
Threats of excess capacity, as well as unfavourable financing conditions, caused these huge investment cutbacks, he added.
“With these threats now largely blown over, the key question for us is how quickly we can reverse these cutbacks to avert a potential supply shortfall several years hence,” Shamsul said.
Meanwhile, the top executive of the Malaysian oil and gas major added that the firm industry costs pose another challenge to oil producers as this shaves their margins, even as oil prices strengthen.
“There should not be the presumption that higher prices necessarily and automatically translate into higher profits for us,” he said.
A more optimistic outlook on the global economy allowed oil prices to stabilize at a higher range of $70-80/bbl so far this year, he noted.
“This is not to say that we are well past the danger zone,” he said, adding that sustainability of recovery largely hinges on policy supports.
But excessive reliance on fiscal stimulus to propel economic growth also has its downside, as illustrated by the debt problems of
With the expected withdrawal of fiscal stimulus across the world this year, “the resilience of our economies will no doubt be severely tested,” he said.
($1 = €0.84)
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|