ExxonMobil 2017 outlook maintains 25% oil demand growth

… says China, India and developing nations including Nigeria to fuel growth

Oil major ExxonMobil in its outlook for 2017 says that China, India and developing nations including Nigeria will continue to grow energy demand by at least twenty –five per cent till 2040.

The world’s industrial power houses, India and China will lead global energy surge by 45 per cent according to ExxonMobil projecting that world population will rise by 1.8 billion by 2014.

“As billions of people join the middle class, it will lead to greater travel, additional cars on the road and increased commercial activity to deliver goods and products. With so much more to haul, commercial transportation energy demand will be up 50 per cent,” says ExxonMobil in its 2017 Outlook for energy.

Each year, the company analyzes and updates its long-term view on energy supply and demand. In 2017, it is forecasting that growth in global energy demand will be led by the increasing electrification of the global economy and that natural gas will comprise 25 per cent of all demand in 2040, surpassing coal.

“Fifty-five per cent of the world’s energy demand growth over the next quarter century will be tied to power generation to support our increasingly digital and plugged-in lives.

“A consequence of this trend will be a large uptick in demand for many types of energy used to generate electricity, notably less carbon-intensive sources such as natural gas, nuclear, solar and wind,” the report says.

This is however contrary to view of analysts and organisations like the World Energy Council (WEC) that peak oil – the point when the maximum rate of crude oil extraction is reached after which the rate of extraction is expected to begin to decline forever – is less than two decades.

Timi Familusi leader, sub-Saharan Africa at Accenture Strategy Energy said oil demand growth has a lifespan of less than fifteen years.

“Everybody have the mind-set that oil is here forever, but analyses done by WEC has shown that the concept of stranded resources is real, peak oil is just 15 years away, that means even if you have the oil, there is not going to be market for it anymore,” Familusi said.

This situation according to him is driven by growth in renewable energy adoption and fall in infrastructure cost, surge in electric vehicles, deeper awareness of climate change impact leading to increased global commitment to cut carbon emissions and slow recovery of oil prices.

It’s easy to see how ExxonMobil will see the cup half full. In 2015, the company earned $289 billion from oil and gas sales. In the same year, it ranked the fourth largest producer of oil and natural gas in the world producing 4.1million oil equivalent barrels per day, twice Nigeria’s production in the same period.

But 2016 upset calculations in large measure as fall in crude oil prices slowed demand and worsened supply glut. Its Nigerian affiliate, at the end of the year, was locked in a disagreement with oil workers union, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) over the company’s decision to lay off staff.

ExxonMobil Nigeria assets have not been spared from sporadic militant attacks. Its current Qua Iboe crude came under force majeure following disruptions to its operations in Eket, Akwa Ibom state, suspected to have been caused by militants.