KUALA LUMPUR, MALAYSIA: Oil prices may have come down but investment in new energy supplies must go on to shield the world from future oil price instability, said Prime Minister Datuk Seri Abdullah Ahmad Badawi.
He noted that in the current environment of sharply reduced liquidity, lower demand and lower prices, companies had far less incentive to invest in new energy supplies.
"Combined with the still growing demand for energy, today's under-investment may lead to another period of high oil price volatility in the future," he cautioned in a keynote address at the 3rd International Petroleum Technology Conference hosted by Petronas.
Abdullah mentioned technology investment as one of three major concerns for the oil and gas industry.
He said the low price environment meant conventional hydrocarbon resources may seem unattractive due to the high cost of extraction.
"Nevertheless, the refinement of technologies relating to unconventional resources must continue since conventional resources will eventually decline," he said.
He said the introduction of hybrid engines and low-energy building designs, as well as renewable power generation, were important areas of the post-petroleum economy.
Abdullah also called for a collective effort among nations to promote energy security.
"National and international oil companies must find new ways to strike mutually beneficial alliances," he said.
"Indeed, as development efforts focus on extracting resources in increasingly challenging areas, the ability to forge strong partnerships and leveraging on respective strengths will be essential to success."
The third area of concern was human capital development.
"We have seen how the low price environment of the 1990s saw an exodus of capable human capital leaving the industry, which was never adequately replaced," Abdullah said.
"This critical shortage was felt many years afterwards, and should remind us of the need for long-term planning."