“Increased investment is an absolute necessity – both in the upstream and downstream areas,” Mandil told delegates at the APPEA National Conference on the Gold Coast yesterday.
“But there’s still the issue of the lack of staff, rigs and skills – investment alone is not going to solve the problem in the short term.”
Mandil said one of the IEA’s main roles was to address energy security, economic growth and environmental protection. He said these “Three Es” could be addressed in part by encouraging consumers to reduce their energy consumption.
“There is tremendous room to moderate consumption growth and reduce emissions but to see this through, industry must work closely with governments,” he said.
Looking beyond 2010, Mandil warned that more investment was crucial if the sector was to close the widening gap between supply and demand.
By 2015, the IEA forecasts energy demand will grow 25%. And with fossil fuels accounting for most of the supply, this equates to an increased global demand from current levels of 82 million barrels of oil per day to 99 million bopd in the next 10 years, according to the agency.
“We need to invest now and decide from there where to go if the present trend continues,” Mandil said.
“The IEA doesn’t believe there’s a lack of resources – only that there is a lack of investment in production and refineries,” he said.
In Australia, Mandil said the IEA agrees that natural gas will be the fuel of the future and a major contributor to the economy.
Currently, Australia is the world’s sixth-biggest gas exporter. However by 2010, the IEA predicts it will come in at third place, behind Qatar and Nigeria.
“This is very good news for Australia,” he said.
“However, while there are good drivers, such as a stable policy regime, less competition from nearby trade suppliers such as Indonesia and an open investment climate, there are also barriers.”
He said these hurdles included industry-wide issues such as a tight labour market and higher material costs, in addition to large geographical distances between developments and markets.
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