Increased oil and gas investment could be a potential requirement, according to IEA's stance
The International Energy Agency (IEA) has issued a statement emphasizing the potential need for new oil and gas projects to maintain current production levels, as global oil demand is expected to peak by the end of the decade. In its statement, the Paris-based agency did not mention any specific news or companies. However, it did highlight the decline in oil and gas output, a trend supported by the Energy Information Administration (EIA) in its recent report. The EIA's analysis of 15,000 oil and gas fields showed that output is declining more rapidly than in the past, with implications for markets and energy security. Despite calls to reduce investments, companies and investors are planning new conventional oil and gas projects. For instance, CanCambria Energy in Hungary is preparing drilling operations for a major deep gas project with significant confirmed resources and a projected net present value of about 1.6 billion USD, starting in late 2025. Similarly, ADX Energy Ltd., via its Italian subsidiary AUDAX Energy, is developing an offshore gas project near Sicily with expected gas volumes of up to 370 billion cubic feet. The IEA's statement did not provide a detailed breakdown of the required investment amounts by region or type of project. It did, however, emphasize the need for careful attention to potential consequences for market balances, energy security, and emissions. The IEA's forecast and its implications for carbon neutrality pledges by some governments have drawn criticism from the oil and gas industry. However, the statement did not discuss the potential impact on carbon neutrality pledges or the oil and gas industry's criticism of its forecasts. The IEA's statement comes amidst a public feud with the Trump administration over its forecasts for lower demand. In July, Energy Secretary Chris Wright threatened to pull out of the IEA if it did not reform how it operates. The IEA has faced criticism from the administration of US president Donald Trump in the past months. The IEA's prediction for upstream oil and gas investment in 2025 is likely to be around $570 billion. Even with projects already approved and under development, a significant gap in production would need to be filled by new conventional oil and gas projects. The IEA concluded that maintaining current oil and gas production levels would require the development of new resources. This forecast by the IEA has considerable implications for investment in further oil production. The agency produces annual reports about energy trends and will likely provide more detailed insights in its upcoming reports.
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