Recession will cut investments in the energy supply sector in 2009 by more than the $100 billion quoted in the International Energy Agency's report released in May, its chief economist said on Tuesday. The agency, adviser to 28 industrialized countries, said in a report presented to the G8 energy ministers in May that oil and gas upstream investment would fall 21 percent, or about $100 billion in 2009 from 2008 due to the global recession. “The information that we are getting... may well mean that we are going to revise the numbers downwards,” Fatih Birol told Reuters in an interview. Birol said the IEA had not made a comprehensive update of the G8 report but that the agency was getting signals the drop in investment would be worse than initially feared. A more detailed update will be released for the IEA world energy outlook in November, he added. Birol cited three reasons for the worse-than-feared decline in investments. “The first thing is that the oil price prospect is still uncertain with most companies not having yet increased their price assumption to base their projects from $40-45,” he said. He cited as other reasons the fact firms did not foresee demand picking up, and that key producing countries still had some spare capacity to be used.
