new peak in oil production needed

Telegraph | At a meeting of oil leaders at the World Economic Forum at Davos, Tony Hayward, group chief executive of BP, said that there was a “supply challenge” for the industry which would have to increase output to 100mbd - a new peak for oil. Mr Hayward said that at present the world was producing between 83 and 84mbd.

He said he hoped Iraq would become a major oil player, producing up to 10mbd in the next decade if the political situation remains relatively stable.

A need for a new peak in oil production will dismay environmental campaigners who hoped that the West’s declining reliance on oil would mean less CO2 emissions. Instead, demand from the emerging economies, including India and the other BRIC countries, China, Russia and Brazil, will lead to new record levels of consumption.

Mr Hayward’s comments were supported by Peter Voser, the chief executive of Shell, who said that the industry would have to find up to $27trn of investment over the next 20 years to meet demand.

At the session new figures from PriceWaterhouseCoopers revealed that non-OECD countries will account for two-thirds of world consumption by 2030. Mr Hayward said that demand from non-OECD nations would increase by 40pc.

“The obvious thing in the mature markets of Europe and the United States is that demand for oil products is in structural decline,” Mr Hayward said. He argued that demand was now coming from the East, pointing out that China sold 13m cars last year.

“The challenge is how do we meet this growing demand for oil and keep a lid on price?” Hayward said.