Joseph McMonigle, Secretary General of the International Energy Forum (IEF), spoke about the importance of Turkmenistan's increasing investment in the oil and gas sector. His speech at the International Investment Forum of the Turkmen oil and gas sector was held in the format of a video link.
According to the IEF Secretary General, there are two key problems that significantly affect energy markets today, both global and regional. The first one is the pandemic, which has had a significant impact on all spheres of activity, including the energy sector. The second is the decline in investment in the oil and gas sector.
Joseph McMonigle cited data from a study organized by the IEF in cooperation with the Boston Consulting Group. It showed a 34% drop in energy company investments, while energy demand is expected to grow at the same time. It is expected to surpass the current 2019 peak in 2022.
As for investments and capital expenditures in the oil and gas sector, they will decline by 25% this year as well. In this regard, the IEF expressed concern about this trend. It is noted that it could eventually lead to a shortage of demand. And this will lead to problems such as rising prices, volatility and insecurity.
The speaker noted that hydrocarbons, as a source of primary energy, are the most in demand today. They account for 79% of the total demand. Therefore, investments in this sphere are an important condition for global energy security. According to calculations, the growth of investments in this industry over three years should amount to 25% annually.
Although Turkmenistan has been successful in attracting investment in the hydrocarbon industry, the level of demand for this energy resource is uncertain for the foreseeable future. There are two scenarios in which the world will move, but which one will be the real one remains to be seen.
However, in light of the fact that the transition to new energy sources is not a quick process, the demand for oil and gas products will remain at a fairly high level until the middle of this century. Turkmenistan's gas reserves will meet the hydrocarbon needs of countries such as India and China, but to do so, new fields need to be developed, which is impossible without attracting foreign investment.