Major oil and gas (O&G) exporters have weathered many upheavals in recent decades, and a renewed commitment to economic diversification will be vital to cope with the changing dynamics of global energy. These include the rising production from new sources such as shale, uncertainties over the pace of oil demand growth and deployment of new energy technologies, according to a new report from the International Energy Agency (IEA).
The analysis, “Outlook for Producer Economies,” a special report in the World Energy Outlook series, examines six economies that are pillars of global energy supply. It assesses how they might fare to 2040 under a variety of price and policy scenarios. The extent to which producer countries steer through essential economic transformation can have major implications for energy markets, global environmental goals and energy security, according to the report.
The report comes at a time of high oil prices, which are a double-edged sword. Higher revenues provide the means to reform, but they can also appear to reduce its urgency. However, higher energy prices encourage production elsewhere while accelerating structural changes in demand, which affect producers’ long-term markets.
The report focuses on six key responses from the energy sector: capturing more domestic value from hydrocarbons, for example via petrochemicals; using natural gas as a means to support diversified growth; harnessing the large but underutilized potential for renewable energy; phasing out subsidies that encourage wasteful consumption; ensuring sufficient investment in upstream (the ability to maintain O&G revenues at reasonable levels is vital for economic stability); and playing a role in deploying new energy technologies, such as carbon capture, utilization and storage.
For more information, visit www.iea.org or call +33 1 40 57 65 00.