PARIS, Sept 22: The IEA said on Thursday that the world still contained an abundance of energy resources, with less than half of the world’s oil and gas used up, but that greater investment in production capacity would be needed to keep future supply in step with demand.

In a report entitled “Resources to Reserves”, the International Energy Agency said that about five trillion dollars (four trillion euros) were needed for investment in new extraction and processing facilities over the next 30 years.

“Proven reserves (of oil and gas) amount to about 2.2 trillion barrels of oil equivalent (boe), which is not far from the 1.5 trillion boe produced so far over more than 100 years of exploitation,” the IEA said in the report.

IEA Director Claude Mandil stressed during a press conference in Paris that the world risked not a penury of resources, but a lack of extraction capacity.

“There is no shortage of oil and gas in the ground, but quenching the world’s thirst for them will call for major investment in modern technologies,” he told reporters.

He said that total reserves of both conventional oil and gas — that which can be easily extracted — and non-conventional resources could total 20 trillion boe.

“Out of these 20 trillion boe, 5 to 10 trillion boe can be considered technically, but not necessarily economically, recoverable,” he said.

Reserves are only extracted when oil companies deem them to be profitable. This means that high oil prices — a higher selling price for oil companies — makes a greater proportion of reserves economically viable to extract.

The IEA report said more investment in new extraction facilities would take place if oil groups simply raised their long-term forecasts for oil prices, reflecting recent changes in the market.

“Currently most companies base their investment decisions on a long-term price of 20-25 dollars per barrel. . . accepting a long-term price of, for example, 30 dollars per barrel, would make an appreciable difference to the economic recoverability of large amounts of oil,” the report said.

On top of the five-trillion-dollar investment in production facilities, “a widespread and determined R&D (research and development) effort will be needed to bring in the technologies required”, the report added.—AFP