Booming US shale output, which helped spark slumping oil prices
London - AFP
Booming US shale output, which helped spark slumping oil prices, will continue over the next 20 years but start to slow, increasing demand for OPEC crude, BP forecast Tuesday.
The British energy giant revealed its verdict in an annual global Energy Outlook report which covers the period 2013-2035.
"The current weakness in the oil market, which stems in large part from strong growth in tight oil production in the US, is likely to take several years to work through," BP said in the report.
World oil prices have collapsed by 60 percent between last June and January, hit by a global supply glut exacerbated by surging US shale production. In reaction, the global energy sector has slashed investment.
"At a time when our industry is focused on the rapid response to a dramatic fall in oil prices, it is instructive to look at events from a longer term perspective," said BP Chief Executive Bob Dudley.
"Today's turbulence is a return to business-as-usual. Continuous change is the norm in our industry. The energy mix changes. The balance of demand shifts.
"New sources of energy emerge, such as shale gas, tight oil, ultra-deepwater oil or renewables. Economies expand and contract. . . Energy companies need to adapt."
US shale oil production hit a record 1.5 million barrels per day (mbpd) in 2014, weighing on demand for crude from the 12-nation Organization of Petroleum Exporting Countries (OPEC) cartel.
"The strength of tight oil and the relative weakness of demand have reduced the market requirement for OPEC crude in recent years," added BP.
"This pressure on OPEC is likely to persist in the early years of the outlook and the response of OPEC to this reduction is a key uncertainty.
"Further out, as tight oil supply growth slows and demand strengthens, the call on OPEC crude begins to increase, exceeding the historical high (32 mbpd in 2007) by 2030."
BP also predicted that US shale production would encounter a slowdown at the start of the next decade, lifting demand for OPEC crude.
"Tight oil supply, notably in the US, continues to grow in the first part of the outlook.
"US tight oil output grows by about 3.0 mbpd between 2013-2035 and accounts for around two-thirds of global tight oil production in 2035."
Turning to the second part of the outlook, BP added: "Growth in US tight oil is expected to flatten out ... reflecting high well decline rates and less extensive resources than gas."
The United States will become a net exporter of energy in 2015 -- and become self-sufficient by the 2030s, according to BP.
At the same time, global energy consumption is expected to jump 37 percent during the forecast period, propelled by keen Asian demand, particularly from China and India.
"The strong growth of US tight oil in recent years has had a dramatic impact, with oil increasingly flowing from West to East rather than East to West," added Dudley.
"This is likely to continue, with strong growth in China and India driving energy demand."
China will likely overtake the United States as the world's top oil consuming nation by 2035, the London-listed energy major added.