BP says OPEC is going to make a massive comeback

Putin saudisRob Griffith/ReutersPresident of Russia Vladimir Putin (L) and Crown Prince Salman bin Abdulaziz Al Saud (R) of Saudi Arabia talk through their interpreters during a plenary session at the G20 leaders summit in Brisbane November 15, 2014.

One of the big stories of the last few years has been the boom in unconventional gas and oil extraction, outside the traditional oil-producing countries.

The explosion of fracking in the US seemed like it was dislodging the old oil producing countries permanently.

But that’s not likely, according to BP’s latest long-term outlook for the energy market. They say the Organisation of Petroleum Exporting Countries (OPEC) isn’t going anywhere, and it will actually make a comeback.

They’re forecasting “OPEC’s market share by the end of the Outlook is around 40%, similar to its average of the past 20 years.”

That’s partly coming from Iraq, which is expected to increase production by two million barrels per day in two decades time. Another extra three billion barrels per day is expected to come from natural gas. Saudi Arabia and other countries have been trying to expand into away from oil.

According to the Financial Times’ write-up of his presentation, BP chief economist (and former Bank of England exec) said “We don’t see a big roll out across the globe of the shale revolution”.

The FT says he added added: “I’ve read report after report about the impending demise of Opec… My hunch is those reports are greatly exaggerated”.

Despite the US becoming a net energy exporter, the middle east and former Soviet Union (FSU) countries still make up a huge chunk of the world’s exports.

There are other massive changes over the period. Despite the fact that China is probably the world’s second most promising shale energy source, it’s also still seeing surging demand for energy, and will surpass the US as the world’s biggest consumer of liquid fuel by 20135, according to BP.

But in terms of growth, China’s expected to give in to another Asian giant in the next 20 years: “India overtakes China as the largest source of demand growth towards the end of the Outlook”.

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