Manama: Saudi Oil Minister Ali al-Naimi called for sustained investment in new output capacity today despite the slump in world prices.
Naimi said global production lost four million barrels per day due to natural depreciation and predicted an increase in demand of one million bpd.
"The oil industry is required to add new production capacity of 5.0 million bpd to compensate for the natural loss in production and meet the growth in global demand," he told an energy conference in Manama.
"Large investments are required to meet such needs. We must continue and even increase the pace of investments in the energy sector."
Oil prices have slumped by more than 50 percent since the middle of last year amid a worldwide supply glut, prompting the cancellation of a string of major investment projects.
Saudi Arabia said this month that more than USD 200 billion worth of energy projects worldwide had been cancelled this year and more cancellations were expected in 2016.
Naimi said that over the next decade, Arab countries, which hold 56 percent of proven global crude reserves and 27 percent of gas deposits, would need to invest around USD 700 billion in energy projects to boost production.
He also called for efforts to stabilise the energy market, saying that Saudi Arabia was prepared to work with OPEC and non-OPEC producers to support prices.
The cartel's decision a year ago not to cut production, sharply accelerated the collapse in prices which are currently hovering around $45 a barrel, down from $115 a barrel in June 2014.
But the undersecretary of the UAE's energy ministry Matar Hamed al-Neyadi defended OPEC's policy to safeguard its market share rather than support prices.
"We believe the OPEC policy is the right one ... 2016 could witness some (upward) correction in the oil market," Neyadi told the conference.
OPEC holds a crucial meeting in Vienna on December 3 to assess the market amid calls for a cut in production.
Bahraini Energy Minister Abdulhussein Ali Mirza, whose country is not an OPEC member, said the oil market was experiencing significant turmoil but insisted that "in the long term, oil is not a commodity in decline."
Experts taking part in the conference gave some backing to OPEC's optimism about an improvement in the market next year.
"The rebalancing process has started but the impact on the oil price will be slow," Bassam Fattouh, director of Oxford Institute for Energy Studies, said.
