LONDON (Reuters) - The oil price collapse has weakened the industry’s capacity to increase output and future production may top out at a lower level than earlier expected, the chief executive of major oil company Total (TOTF.PA) said.
Christophe de Margerie said that world oil output may hit a plateau below 90 million barrels per day in the years ahead, less than earlier envisaged.
“The capacity that the oil industry has to go to 93-95 million barrels per day is already over,” the CEO of the French oil major told reporters on Friday at a briefing in London.
Delays in heavy oil projects in Canada and Venezuela, which are suffering under lower oil prices and high costs, and the likely failure of Iraq and Iran to increase output as much as hoped, due to political difficulties, were to blame, he said.
Total has long been the least optimistic of the big international oil companies about the world’s ability to grow oil output enough to meet demand. Others, such as Britain’s BP (BP.L), deny any resource constraints.
The International Energy Agency, energy adviser to many of the biggest industrialized nations, said in November that world supply and demand would rise to 106 million bpd in 2030. Global supplies were 86.4 million bpd in 2008. “There will be a shortage of energy in the medium to long term,” de Margerie said.
Oil prices have collapsed to around $35 a barrel from over $147/bbl in July and crude demand is falling due to global economic weakness.
De Margerie urged state oil companies, which dominate global oil production, to maintain investments despite the oil price collapse, to ensure the world’s production growth capacity is not eroded further.
The very biggest publicly traded oil companies, such as Total and BP, plan to maintain investments despite many state and private companies cutting capital spending in response to the lower oil price.
Total is eyeing possible investments in Brazil and Venezuela and the company could seek to take advantage of lower company and oil field values to make acquisitions, de Margerie said.
Editing by Anthony Barker