DNV GL predicts oil demand to peak in 2023

oil peakNew oil fields will be needed until at least the 2040s, while new gas developments will be required beyond 2050. (Image source: Richard Masoner/Flickr)DNV GL’s 2018 Energy Transition Outlook, an independent forecast of the world energy mix in the lead-up to 2050, has predicted that oil and gas demand will peak in 2023 and 2034

According to the DNV GL’s Outlook, new oil fields will be needed until at least the 2040s, while new gas developments will be required beyond 2050. DNV GL’s Outlook predicts that operators will favour production from a greater number of smaller reservoirs with shorter lifespans, lower break-even costs and reduced social impact compared to those currently in operation.

Liv Hovem, CEO, DNV GL-oil and gas, said, “Most easy-to-produce, ‘elephant’ oil and gas fields have been found and are already in production. Smaller reservoirs will likely be harder to explore and develop commercially. Digitally-enabled technologies such as directional drilling and steerable drill bits, 4D seismic backed by advanced data analytics and steam flooding, will be crucial to ensure that exploration and production is economic and efficient.”

DNV GL’s Outlook recommends that existing technologies for decarbonisation, such as carbon capture and storage (CCS) will also need to be implemented at scale for the oil and gas sector to stay relevant in a rapidly decarbonising energy mix. It forecasts CCS will capture only 1.5 per cent of emissions related to energy and industrial processes in 2050.

Global warming will likely reach 2.6°C above pre-industrial levels in 2050, according to the Outlook. This is well above the 2°C target set out by the Conference of Parties (COP) 21 Paris Agreement on climate change. By 2050, the Outlook predicts 972 gigatonnes of carbon will be emitted, overshooting the 810 gigatonne budget associated with the target.

“Our forecast reaffirms that the oil and gas industry has a vital role to play in the energy transition. It is our sector’s responsibility to maintain a sharp focus on decarbonisation, sustainable production, cost management, and the need to embrace innovative technologies to secure long-term supply of sustainable and affordable energy,” added Hovem.

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