Energy Watchdog Warns Of Oil, Electricity Shortages

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The reports says after two years of unprecedented decline, global upstream oil and gas investment is expected to stabilise in 2017.

Global investment in the energy sector fell 12 percent last year to $1.7 trillion in 2016, or 2.2% of the global Gross Domestic Product (GDP) according to the latest report by International Energy Agency (IEA).

The International Energy Agency's annual World Energy Investment report released today warns that a drop in conventional oil exploration could cause a shortage of crude and other fuels in the near future.

 It says policies and regulations may not be encouraging enough investment in electricity that's available when users need it.

The report says for the first time, spending on the electricity sector around the world exceeded the combined spending on oil, gas and coal supply.

The share of clean-energy spending reached 43% of total supply investment, a record high.

"Our analysis shows that smart investment decisions are more critical than ever for maintaining energy security and meeting environmental goals," said Dr Fatih Birol, the IEA's Executive Director.

He said as the oil and gas industry refocuses on shorter-cycle projects, the need for policymakers to keep an eye on the long-term adequacy of supply is more important.

Dr Birol added: "The good news is that in spite of low energy prices, energy efficiency spending is rising thanks to strong government policies in key markets."

For the first time, the report tracks investment financing sources across the entire energy sector. More than 90% of investments are financed from the balance sheets of companies, governments and households, reinforcing the importance of sustainable industry earnings in funding the energy sector.

The reports says after two years of unprecedented decline, global upstream oil and gas investment is expected to stabilise in 2017.

Uganda is one of the counties that recorded low interest in new oil and gas exploration and drilling in 2016. The international Oil Companies were reluctant to invest in expensive oil exploration activities at the time low global oil prices.

2017 is recording renewed activity in the oil and gas sector with planned construction of a refinery in Hoima.

The construction of the oil pipeline from the Abertine Gaben to Tanzania's Tanga port will see more activity in the Industry that it were in 2016.
CNOOC one of the Joint Venture Partners in Uganda last week invited competent companies to bid to pride services of Engineering, procurement and construction (EPC) for Kingfisher Development project.

Plans by CNOOC to begin activities like wellpads and central processing facilities in the Kingfisher project is another signal of renewed activity in oil and gas sector. 

China's state-owned oil firm China National Offshore Oil Corporation (CNOOC) won the $2bn deal in September 2013. CNOOC was expected to develop the Kingfisher oil field over a period of four years.
 
The Kingfisher field is estimated to hold 635 million barrels of oil, of which 196 million are recoverable. The field is expected to have an initial capacity to produce between 30,000 to 40,000 barrels of oil per day.