Oxy CEO: Global oil demand expected to exceed pre-pandemic levels by 2023

Global demand for oil will rise beyond pre-pandemic levels of 100 million barrels per day in 2023, accelerated by economic recovery in India and China, according to the president and CEO of Occidental Petroleum.

“I think we’re going to hit a solid 100 million [bpd] ask or maybe a little more next year. But I think by 2023 we’ll start to see these [levels] because I think China and India certainly have the opportunity to grow… both will have healthy economies once the pandemic is over, ”Vicki Hollub told The National in an interview.

Oil demand is expected to grow 5.5 million b / d in 2021 and 3.3 million b / d in 2022 to reach 99.6 million b / d, according to the International Energy Agency. Opec expects demand for crude to be higher, reaching 100.6 million bpd next year.

The 100 million barrels per day mark in global oil demand has already been crossed, according to “Big Oil” companies such as BP.

Demand for crude and derivative products fell last year as the spread of Covid-19 reduced air and ground transportation. Oil prices fell as benchmark US West Texas Intermediate crude briefly traded below zero as supply exceeded demand.

However, with the easing of border restrictions and the opening of economies, oil prices are currently trading at multi-year highs.

The main oil indices – Brent and West Texas Intermediate – have gained more than 60% since the start of the year and are above $ 80 a barrel.

However, the oil trade between $ 80 and $ 85 a barrel “is too high,” Ms. Hollub said.

“What Opec + did was what the world needed and [we] applaud them for being able to accomplish what they did, because again, that would require a market where supply and demand are balanced.

Opec +, the producer group led by Saudi Arabia and Russia, is on track to add 2 million barrels per day of supply by the end of the year, reversing historic restrictions it it performed in 2020 amid a record demand crisis.

Ms Hollub, who runs the Permian Basin’s largest producer, said production from the United States, the world’s largest producer of crude, will remain limited.

“At the end of the day, I still think production in the United States probably wouldn’t go back above 12 [million bpd] and a half approximately. So we won’t come back to 13 [million bpd],” she said.

Occidental will continue to benefit from production growth at its dealerships in the Middle East, particularly in the United Arab Emirates and Oman.

The company recently secured the rights to develop Blocks 3 and 5 in Abu Dhabi under the national oil company’s second tender.

Ms Hollub, who declined to comment on potential volumes of untapped reserves, said exploration of Block 5, which is across the border from its concession in Oman, was “very exciting.”

Occidental is also trying to reduce the carbon intensity of barrels produced in the United States and around the world through its direct carbon capture program in the air, in line with its pledge to achieve net zero emissions by mid-September. century.

The company is developing a complex in Texas with the capacity to capture and sequester 1 million tonnes of carbon dioxide per year. The project, currently in the design phase, will be completed by 2024.

The energy industry is the largest source of carbon dioxide emissions in the world and is under increasing scrutiny for its impact on global warming.

The carbon capture and sequestration sector could have the potential to grow into “a $ 3 trillion to $ 5,000 billion industry,” Ms. Hollub said.

“It’s going to be a big industry and that’s why when we talk about Oxy, we become a carbon stewardship company. This is what we are talking about.

“We can pretty much offset the carbon emissions from all the barrels we mine anywhere using this direct air capture technology,” she said.
Source: Le National


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Felix J. Dixon