High crude prices are tied to concerns over the delivery of future oil and gas, not lack of existing resources, Total SA's (TOT) chief executive said Tuesday.
In a speech to the World Petroleum Congress, Christophe de Margerie said the "oil price would be much higher if there was not enough oil."
The head of the French oil giant said crude prices were supported by concerns over the oil industry's ability to deliver new oil and gas from projects in the coming 10 years.
De Margerie said "oil production will reach 95 million barrels a day by 2020" worldwide, according to Total's own estimates. He said, however, that for this level to be reached, oil "capacity expansion will have to offset declining fields," as output is dropping by 5% to 6% a year. Unless there is a big change in the way these things are managed by politicians...an increase in the plateau (of 95 million barrels a day) will be difficult," de Margerie said.
"But at least the plateau will be longer" because the resources exist anyway, he said.
Gas production is facing similar challenges, he said. Separately, de Margerie said the start up of Total's Yemen LNG gas project is expected in the winter of 2008-2009.