Mr Ng Wai Choong, Chief Executive of the Energy Market Authority announced “New Energy Realities” as the theme for Singapore International Energy Week (SIEW) 2016 on 23 March. More than 360 industry leaders and representatives from the energy industry attended the SIEW 2016 Launch.
Energy prices have stayed low for longer than most had anticipated, discouraging new upstream investments which would impact future supply. At the same time, the Paris Agreement following COP21 has given new impetus to the deployment of renewables. Innovative technology has continued to make energy production, systems and networks smarter, presenting new possibilities. SIEW 2016 will discuss how global stakeholders can work together to navigate through this period of change.
At the SIEW 2016 theme launch, Neil Atkinson, Head of the Oil Industry and Markets Division at the International Energy Agency (IEA), presented the IEA’s latest Medium-Term Oil Market Report. Atkinson said the supply and demand for oil will slowly move closer to a balance in the next two years with prices averaging between US$35 to US$40 a barrel this year. Prices have bottomed out and output has dropped, alleviating the current surplus in the oil markets.
Atkinson was then joined by David Hewitt, Co-Head of Global Oil & Gas and Equity Research at Credit Suisse for a dialogue on the global outlook for oil. Atkinson described current oil market conditions and global demand-supply dynamics as “the new reality” that we are seeing. Both speakers noted the rapid growth and resilience of US shale production despite the plunge in oil prices over the last 18 months. Atkinson highlighted the speed at which US growth in production would be able to resume as a factor for “major, major uncertainty over the next few years”.
Another focal point of the discussion was that investments would remain crucial to meet current oil demand and future growth. Building on the IEA’s recent warnings against low levels of oil and gas investments, Atkinson said that some US$300 billion in investments is needed just to maintain oil production at existing levels, let alone meet expected growth in global oil demand.
“If those kinds of investment cuts persevere through 2016 and possibly into 2017, we run a risk of there being a very, very tight balance,” he added.
Looking ahead in the medium-term, Asia, led by China and India, will remain the main source of oil and gas demand growth, according to both Atkinson and Hewitt.
“China’s oil demand will continue to grow at an average of close to 3.5 percent due to strong consumer-oriented growth, such as vehicular growth,” Atkinson said.
“As you look at the Indian demand […] it’s signaling potentially a replication in the direction of where China has been for the last 10 to 12 years,” Hewitt said, highlighting India’s huge potential in driving global demand. “Even if it’s not as strong as in China, at least you have two building blocks in Asia to contribute to global demand,” he added.
When asked if the Paris Agreement on climate change had any impact on the demand for oil, Atkinson was of the view that oil is still going to remain important due to the expansion in vehicle fleets in China, India and other developing countries.
“Oil has already lost a huge part of its market share in terms of power generation […] but it is still going remain incredibly important as far as transport is concerned and in terms of the mass market,” he said.
The dialogue between Atkinson and Hewitt highlighted some of the new energy realities global energy players are facing today in a market dominated by a supply overhang, and served as a prelude to the conversations that will be continued at SIEW 2016.
SIEW 2016 will gather global energy leaders at its week-long conferences and exhibitions covering the entire energy spectrum – including oil and gas, downstream, renewables and financing. EMA’s anchor events, the SIEW Opening Keynote Address and the Singapore Energy Summit, will kick-off the week of discussions with a focus on Asia’s new energy realities, the transition to a low-carbon future, and the evolving utility business.
For the first time, SIEW 2016 will host the Photovoltaic Science and Engineering Conference – 26 (PVSEC-26) as part of the Asia Clean Energy Summit (ACES). There will also be a special edition of the Asian Energy Financial and Investment Conference. Delegates can also look forward to more exhibitions:
- Gas Asia Summit will feature an exhibition alongside its conference for the first time
- EU Business Avenues in South East Asia – Green Energy Technologies 2016, an exhibition focusing on renewables, will also return to SIEW this year
- Asian Downstream Week will bring together service and technology providers in the refining & petrochemical industries
SIEW 2016 will be held at the Sands Expo and Convention Centre, Marina Bay Sands Singapore from 24 to 28 October 2016.
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About Singapore International Energy Week (SIEW)
In its 8th edition, Singapore International Energy Week is the premier platform in Asia for energy insights, partnerships and dialogue, bringing together the world’s leading conferences, exhibitions and roundtables in one week and one location. SIEW enriches the global energy conversation by convening political, business, academic and energy industry thought-leaders to define and advance the world’s energy challenges, solutions and actions across the spectrum of oil and gas, clean and renewable energy, and energy infrastructure financing.
Please visit www.siew.gov.sg for more information.
About the Energy Market Authority
The Energy Market Authority (EMA) is a statutory board under Singapore’s Ministry of Trade and Industry. Our main goals are to ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore. Through our work, we seek to forge a progressive energy landscape for sustained growth.
Please visit www.ema.gov.sg for more information.