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Business Times: Plenty of oil, gas to meet demand: Shell

Business Times (Malaysia)
February 9 2006
LONDON, Wed: Royal Dutch Shell plc chief executive officer Jeroen van der Veer said the world has plenty of oil and gas to meet demand, with future supplies aided by development of so-called unconventional reserves such as heavy-oil projects.
“The world is not running out of energy,” van der Veer said today at an energy conference in Houston sponsored by Cambridge Energy Research Associates.
“If you take unconventional fossil reserves into account, then we are a long way away from defeat.”
Unconventional oil and gas projects include heavy oil, oil produced from shale and natural gas drawn from the seams of coal beds.
Van der Veer’s comments addressed growing concerns that the world’s oil production has peaked, just as US oil output did in the early 1970s, and that growing demand from emerging economies like China and India will put pressure on existing supplies.
Concerns over whether oil output has peaked combined with Asian demand helped drive oil futures to a record high in August of US$70.85 (US$1 = RM3.74) a barrel on the New York Mercantile Exchange.
Dan Yergin, head of the Cambridge Energy Research Associates, has discounted peak-oil concerns, arguing that new oil projects already will meet growing demand.
Yergin won a Pulitzer Prize for the book titled “The Prize: The Epic Quest for Oil, Money & Power”.
Prices that have average US$65.33 a barrel this year on the New York Mercantile Exchange will slip back into the US$40 range over the coming three to four years, Yergin’s group said in a report in June.
They estimated that supply could exceed demand by as much as 7.5 million barrels a day within five years.
Shell has said it will boost capital spending this year by 27 per cent, to US$19 billion, to try to boost production. — Bloomberg

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