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* Executives warn of lack of investment in new fields
* Volatility to remain even after OPEC deal -Total CEO
* Shale, technology to mitigate impact of supply shortage
By Ron Bousso
ISTANBUL, Oct 12 (Reuters) - While OPEC and other big crudeproducers work towards a deal to cap production to erode a glut,industry executives are concerned the sharp drop in investmentthat followed the oil price crash could lead to another crisis -a supply shortage.
Over $1 trillion worth of oil projects have been cancelledor delayed, Saudi Energy Minister Khalid al-Falih said on Mondayat the World Energy Congress in Istanbul, after companiesslashed budgets due to oil prices more than halving to around$50 a barrel since mid-2014.
Oil fields take years to develop. In many cases, a decisiontaken in 2016 to develop a field means oil production will startin around 2020.
OPEC, which produces around a third of the world's oil, willhold talks with non-member oil producers on Wednesday to workout details of a global agreement to cap production for at leastsix months. Non-OPEC member Russia, the world's largestproducer, has lent its support.
And as OPEC revives its role as an oil "central banker", French oil and gas company Total Chief ExecutivePatrick Pouyanne urged the industry to start investing again.
"By 2020 we will have a lack of supplies," Pouyanne told theconference.
"Volatility has been huge. The stress on everybody, thebalance sheets of companies and countries is huge," he added.
BP Chief Executive Bob Dudley echoed his concerns.
"As much as a $1 trillion of big projects have beencancelled or deferred around the world and that could catch upwith the world," Dudley said at the same event.
So far this year, eight new oil and gas projects have beenapproved, which will add around 1 million of barrels of oilequivalent when they come on stream, Bernstein analysts said.They are expected to take an average of 38 months to comeonstream, at a combined cost of around $22.1 billion.
The International Energy Agency forecast in its 2016medium-term report that oil demand will outstrip suppliesstarting in 2018.
But Dudley expects supply and demand to be relativelybalanced until the end of the decade due to new fields that arecoming on line in the coming years and the abundance of U.S.shale oil, which can be extracted within a few months.
As a result, he expects oil prices to remain within a bandof $55 to $70 a barrel until the end of the decade, well belowthe $114 a barrel it hit in mid-2014.
"I do see the price of oil setting itself a band. Shale oilin the US will attenuate the price a bit."
But unlike previous supply shortages, new technologicalbreakthroughs that improve field production and reduce downtimewill lead to shorter cycles, said Lorenzo Simonelli, CEO of oilservices company GE Oil & Gas.
"The industry will continue to be volatile. However, it hasalso changed with the advent of shale and technology we aregoing to see smaller cycles of volatility," Simonelli said.
(Reporting by Ron Bousso; editing by Susan Thomas)
