World's energy security may be fatally compromised, Saudi Aramco warns

Low levels of investment are putting the world's energy security at risk according Saudi Aramco, the world's largest petrochemicals company.

Speaking at the World Petroleum Congress in Istanbul, the chief executive officer of the state-owned Saudi petrochemicals giant said financial investors were being misled by talk of peak oil demand and stranded resources.

"The volume of conventional oil discovered around the world over the past four years has more than halved compared with the previous four.

"And none of this is being helped by misleading narratives about 'peak oil demand' and 'stranded resources'," Amin Nasser said in remarks prepared for his speech.

Such thinking had led investors to shy away from making large investments in the sector with about $1trn of investments having being lost.

On top of that, the recent downturn in the sector meant nearly $1trn of investments had not taken place, leading him to conclude that the outlook for supplies was increasingly worrying.

Nasser referenced estimates according to which just over the next five years 20.0m barrels per day of fresh oil supplies would be required to quench rising demand and offset natural production decline at older fields.

Yet the rate of new discoveries was rapidly falling, he explained.

Against that backdrop, Nasser said Saudi Aramco would invest more than $300bn over the next decade in efforts to maintain the country's spare oil production capacity and explore for more natural gas.

However, he added that Saudi would not seek to increase its spare capacity, and according to later reports added that the company's upcoming flotation would not be impacted by the then current level of oil prices.