MOSCOW (MRC) -- Global energy transition is creating uncertainty for an estimated USD14 trillion worth of oil and gas assets that have long depended on an indefinite rise in demand to offset risks despite a pandemic boost this year, reported Reuters with reference to consultancy Wood Mackenzie's statement.
As the world recovers from the COVID-19 pandemic, oil and gas demand is set to go beyond the record 160 million barrels of oil equivalent per day reached in 2019, it said in a report.
“After six years of weaker prices, upstream is fitter and leaner than ever,” Woodmac said, adding that the sector will generate as much cash flow this year at USD60 per barrel as it did at USD100 prior to the 2014 price crash.
While the industry has enjoyed a century of near continuous demand growth, it now finds itself having to supply oil and gas to a world in which future demand and price are highly uncertain, Wood Mackenzie vice president Fraser McKay said.
A gradual energy transition would see oil demand staying above 90 million barrels per day to 2050, encouraging investment in costlier supplies and supporting prices at just above USD80 a barrel by 2030, Woodmac said.
However, if the world decides to limit global warming to 2 C by 2050, oil demand would peak before 2025 and fall towards 35 million bpd by 2050, 70% below peak levels. Brent would average USD40 a barrel by 2030 and decline after that.
In both scenarios, gas demand and prices would remain resilient, supported by coal displacement in Asia, Woodmac said, adding this would draw more investments toward gas production rather than oil.
The first scenario would keep liquefied natural gas (LNG) prices at USD8 to USD9 per million British thermal units (mmBtu) through 2040 and beyond, while in the second, LNG prices remain robust at USD7 to USD8 per mmBtu, before starting to fall post 2040.
As MRC informed earlier, in April, 2021, ExxonMobil, one of the world's petrochemical majors, and Global Clean Energy expanded their five-year agreement to increase ExxonMobil’s purchase of renewable diesel up to 5 million barrels per year.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
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