Olusola Bello
Agitation at COP26 against Climatic change notwithstanding, the Organisation of Petroleum Exporting Countries on Tuesday said investments worth an estimated $1.5tn would be invested in the downstream sector of the oil and gas industry from this year till 2045.
It also predicted that there would be additional closure of refineries across the globe in the coming years
Of this total amount, $450bn worth of new refinery projects and expansion of existing units would be invested in Nigeria and other developing nations.
This was disclosed by Sanusi Barkindo, the Secretary-General, OPEC, at the ongoing African Energy Week in Cape Town, South Africa.
According to him, it is estimated that in terms of downstream investment, roughly $1.5tn will be spent during the period 2021-2045.
“Of this, 80 percent, or $9.2tn is in the upstream, with another $1.5 and $1.1tn needed in the downstream and midstream, respectively.”
He observed that creating the stability in the oil market necessary to attract the required levels of investment had been one of the primary motivations behind OPEC’s collaborative efforts with 10 non-OPEC countries under the “Declaration of Cooperation” umbrella.
“This pioneering framework for multilateral energy cooperation continues to contribute greatly to the post-pandemic economic recovery as a vital stabilising force in the global oil industry,” the OPEC scribe stated.
Barkindo, however, told participants at the event that last year’s oil demand shock caused by the COVID-19 pandemic resulted in numerous refinery closures worldwide, and that there would be additional closures in the coming years.
He further stated that looking ahead, from 2021 to 2026, OPEC was expecting to see around 6.9 million barrels per day of new refining capacity to come online, mostly in the Middle East, Asia-Pacific and Africa.
He said Africa’s potential refining capacity was expected to start increasing in 2022 at just below 0.4mb/d, before reaching just above 1mb/d in 2026.
Barkindo stated that many of these projects would involve petrochemical integration.