ISTANBUL (AA) – Access to credit was a big challenge for the oil industry in the current cycle of contraction and the outlook for next year appears bleak for new investments, Mohammad Barkindo, secretary general of OPEC said on Monday.
Speaking at the World Energy Congress in Istanbul, of which Anadolu Agency is the global communication partner for 2016, Barkindo said the oil contraction period caused mainly by excessive supply had been "the most severe contraction cycle" in the oil industry.
“At the moment, it is a cause of serious threat to the security of supply for both producers and consumers,” he added.
Barkindo said neither consuming nor producing countries had expected the contraction cycle to continue for as long as it had.
"They had expected a period of maybe six months to one year. Everyone, both the consumers and producers, are equally worried about this development," he said.
Demand for oil in the mid-and long-term is expected to increase with populations rising swiftly in developing countries, according to Barkindo.
"We expect oil demand to reach 17 million barrels by 2040," he said.
Barkindo added that during the low-price environment, new investments in the oil industry dropped by 26 percent.
- Socar to meet 20 percent investment need in Turkey -
President of the State Oil Company of Azerbaijan (SOCAR), Rovnag Abdullayev, said between $100 and $200 billion needs to be invested in Turkey's energy sector to realize its 2023 goals.
“Socar will meet about 20 percent of this need with its energy infrastructure investments in Turkey worth $18 billion," he said.
He explained that the current low-price environment for hydrocarbons had not stopped the company moving forward with its investments.
"We undertook huge projects despite this environment. We have the ongoing $45-billion-worth Southern Gas Corridor project. Our TANAP (Trans-Anatolian Natural Gas Pipeline project) has also been successful,” he said.
TANAP will deliver Caspian gas to Europe via Turkey. The first delivery of gas from the Caspian region to Turkey is planned for 2018 and deliveries to Europe are anticipated in 2020.
Abdullayev also said the Star refinery project -- a greenfield complex crude oil refinery in the Izmir region of Turkey -- will help the country adapt to the changing world faster and will help Turkey save billions of dollars in imports.
The Star refinery is considered Turkey's biggest foreign investment in the last 30 years and is the first refinery built by the private sector in Turkey's history. The refinery, which broke ground in 2012, is expected to become fully operational by 2018.