London (Platts)--6Nov2008

The International Energy Agency said Thursday that investment of $26
trillion, $4 trillion more than previously projected, was needed between now
and 2030 to ensure that the world has enough energy.

The IEA said in an executive summary of its World Energy Outlook, which
will be released next week, that there was a "real risk" that under-investment
would result in an oil supply crunch.

The Agency warned that oil prices were likely to remain "highly
volatile," especially in the next couple of years. It assumes that prices will
average $100/barrel in real terms between now and 2015, rising to more than
$120/b in 2020. In nominal terms, however, it assumes that the oil price will
double to slightly more than $200/b in 2030.

"The projected increase in global oil output hinges on adequate and
timely investment," it said. "Some 64 million b/d of additional gross
capacity--the equivalent of almost six times that of Saudi Arabia today--
needs to be brought on stream between 2007 and 2030. Some 30 million b/d of
new capacity is needed by 2015," it said, adding: "There remains a real risk
that under-investment will cause an oil supply crunch in that timeframe."

World oil demand is seen reaching 106 million b/d in 2030--10 million b/d
lower than projected in last year's Outlook--from 85 million b/d in 2007. The
downward revision of 2030 demand reflects "the impact of much higher energy
prices and slightly lower GDP growth, as well as new government policies
introduced in the past year," the IEA said.

Non-OECD countries account for all of the projected increase in demand,
with China, India and the Middle East accounting for four-fifths, while OECD
demand falls slightly as non-transport fuel demands decline, the IEA said.

The projections assume "that the IEA crude oil import price averages
$100/b (in real year-2007 dollars) over the period 2008-2015, rising to
over $120 in 2030," the IEA said.

"This represents a major upward adjustment from last year's Outlook,
reflecting the higher prices for near-term physical delivery and for futures
contracts, as well as a reassessment of the prospects for the cost of oil
supply and the outlook for demand," it said.

"In nominal terms, prices double to just over $200/b in 2030. However,
pronounced short-term swings in prices are likely to remain the norm
and temporary price spikes or sharp falls cannot be ruled out," it said.

"Prices are likely to remain highly volatile, especially in the next year
or two. A worsening of the current financial crisis would most likely depress
economic activity and, therefore, oil demand, exerting downward pressure on
prices. Beyond 2015, we assume that rising marginal costs of supply exert
upward pressure on prices through to the end of the projection period," the
IEA said.