(Ecofin Agency) - Oilfields services giant, Halliburton, has said that the world will need 20 million barrels of oil every day by 2020 so as to meet growing demand in the face of lower crude production.

According to the President of the company, Jeff Miller, capital expenditures have been slashed, asset sales are on the rise and the market has basically hit the bottom.

He added that when expenditure drops as a result of low oil prices, investments reduce for oil companies to produce crude, thereby resulting in a drop in total output over time and less global supply for future.

Miller cautioned that there would be 14 million bpd of supply shortage by 2020 on account of a shortage in capital expenditure in addition to a continued rise in global demand which is expected to increase by 1 to 1.5% per annum, reaching 6 mbpd by 2020.

“This adds up to 20 mbpd of [supply-demand] gap by 2020. I expect that when we do see the supply shock and the race to fill the demand, the fastest incremental barrel of oil to the market wins and that barrel is the North America unconventional oil,” he told AA news.

The International Energy Agency in its report last month, revealed that global oil demand was 95.6 mbpd in Q2, while world oil production was 97 mbpd in July.

Miller advised that unconventional oil, extracted by fracking, is the fastest method to fill the gap, and is also the time span between recovery to the market.

Oil prices extended gains by over 1.5% on Thursday after industry data showed the largest weekly drawdown in crude stocks in over thirty years.

The Organization of the Petroleum Exporting Countries and non-Opec producers such as Russia are expected to discuss the issue at informal talks in Algeria from Sept. 26-28.

Anita Fatunji