Crude oil demand will eventually pick up as Chinese growth recovers in coming years, buoying prices, the chief executive of state energy giant Kuwait Petroleum Corp (KPC), Nizar Al Adsani, said.
"Demand will pick up and supply will flatten out, given the lack of investment, so the price will be supported," he told a petrochemical conference in Dubai.
"I think the growth of the middle class in China and infrastructure spending means you will see more cars and demand for more gas and other products and that demand will eventually continue to grow," he said.
Still, Adsani said he expected oil prices to remain volatile in coming years, with much depending on how quickly US shale production responded to rising prices and on the extent to which lower investment elsewhere downgraded crude production capacity.
He also said he expected competition between Opec producers and non-Opec producers to continue. KPC is seeking to grow its refinery business in Asia and is talking to China and Indonesia.
"We are talking to the Chinese and we have a memorandum of understanding with the Indonesians and we will continue to talk to them but we have nothing concrete yet," Adsani said, adding that a refinery project in Asia could be announced next year.
He also said that the Vietnam refinery is 60 per cent complete.
Kuwait has announced $120 billion of capital spending on energy over the coming five years. Of that sum, $50 billion has already been allocated to the Zour refinery project, a clean fuels project, for upstream work and for petrochemicals projects, he said.