8 November 2011, Sweetcrude, Vienna – Nigeria and the other eleven members of the Organisation of Petroleum Exporting Countries (OPEC) would be spending $300 billion on about 132 upstream projects in the next five years.
OPEC, which supplies a third of world’s oil, said in its World Oil Outlook (WOO) for 2011 released at the weekend that member countries would execute the 132 projects between 2011 and 2015.
“Based on the latest upstream project list provided by member countries, the OPEC Secretariat’s database comprises 132 projects for the five-year period 2011–2015. These could translate into an investment figure of close to $300 billion should all projects be realised”, the group said.
Investment decisions are influenced by factors such as the price of oil and the perceived need for OPEC oil. In 2010, the world emerged from the global economic crisis that choked growth in 2008 and 2009.
This has continued into early 2011, although the risks have escalated and growth rates are markedly varied across countries and regions, OPEC said.
The organisation noted that the collapse in oil demand in 2009, combined with downstream capacity additions led to substantially lower refinery throughputs, which shifted the global refining system into a level of effective ‘spare capacity’ of more than 7 million barrels a day(mb/d), a level last seen in the industry at the end of the 1980s.
It said the new projects coming on stream over the next five years were expected to reverse this trend, adding that the overall refining surplus could approach 10 mb/d by 2015 unless some capacity is closed.
Declining oil prices in the wake of the global financial crisis, which eroded world demand for crude oil, had forced the OPEC to delay 35 oil projects till after 2013.
OPEC’s Secretary-General, Mr. Abdalla El-Badri, disclosed at a Chatham House energy conference, in Febraury 2009, that the group’s revenue had been adversely affected by oil’s record plunge, a development which he said prompted members countries to set back 35 of the 150 projects due to come on line in the next few years to expand supply.
El-Badri had stated that the falling prices of crude oil would not only affect investments in both the upstream and downstream, but would delay future investments or cancellation of future investments, a development, which automatically would affect oil supply to the market.
In adition to Nigeria, other OPEC members are Algeria, Angola, Ecuador, Islamic Republic of Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.