SAUDI DROPPED PRICES
Multinational oil companies will be ready to negotiate new agreements with producing countries feeling pressure from lower crude oil prices, but the emphasis will be on reviving neglected fields instead of finding and developing new ones, a former Eni SPA chief executive said.
"Eni and other major international oil companies want to go to already producing fields in Iran once sanctions end and apply their technology to recover more oil," Paolo Scaroni, who now is the Rothschild Group's deputy chairman, told his audience at Johns Hopkins University's School for Advanced International Studies on Oct. 21. "No one is interested in investing billions and waiting 7-8 years to produce oil."
But companies themselves aren't immune from financial pressure resulting from continued lower global crude prices, Scaroni said. "They're cutting more expensive investments to preserve shareholder dividends," he said. "They can only do this for another 2-3 years."
This is leading some multinationals to withdraw from frontier areas if there's no significant near-term potential and concentrate on improving recovery rates in older fields, Scaroni said. "What these companies know that national oil companies don't is enhanced recovery, which lets them increase rates from 30% to 50% and higher," he said.
"It's a process of continuous improvement," he said. "It's not a breakthrough, but every international oil company spends a lot each day to increase its recovery rates."
Scaroni said he does not expect global crude prices to increase soon unless there's a significant supply disruption. A decrease is more likely with additional production possible from Iran (6-7 million b/d), Iraq (9-10 million b/d), and Libya, he said. Another 10-15 million b/d on the world market could push prices down to the $30/bbl range, he said.
Russia and Saudi Arabia can both be expected to continue producing at nearly full capacity, Scaroni said. "Saudi Arabia actually triggered the price drop when it decided to defend its market share. The number of shale oil wells in North America has declined ever since, and probably won't start to increase until the price hits $60[/bbl]," he told his audience.
Scaroni also noted that more companies and governments are saying global climate change is real in the last 2 years, "which means renewables will go ahead regardless of oil prices." He said, "But if we do not solve storage challenges, their progress will be constrained. The technology is not there yet, but there are thousands of peoples around the world who are working on it."
|January, 19, 12:45:00|
|January, 19, 12:40:00|
|January, 19, 12:35:00|
|January, 19, 12:30:00|
|January, 19, 12:25:00|
|January, 19, 12:20:00|
PLATTS - For full-year 2017, South Korea's crude imports from its biggest supplier Saudi Arabia fell 1.7% to 319.02 million barrels, compared with 324.45 million barrels in the previous year, customs data showed. On the contrary, South Korea has imported 1.77 million mt, or around 13 million barrels, of crude from the US in 2017, about four times higher than in 2016. Shipments from Russia grew to 140,000 b/d last year from 112,000 b/d in 2016.
AOG - ADNOC’s 2030 strategy, he said, aims to capitalise on predicted global economic growth and demand for oil and petrochemical products, particularly in non-OECD countries. As its business responds to changing market dynamics, the company will continue to broaden its partnership base, strengthen its profitability, adapt to new realities and expand market access.
WNN - Under the terms of the assignment and purchase agreement it has signed with Nucleus and Brookfield, Toshiba will sell its rights to assert claims against Westinghouse related to the parent guarantees in the amount of $5.788 billion, and on account of other claims Toshiba holds against Westinghouse in the amount of $2.284 billion to Nucleus, for the sale price of $2.160 billion.
REUTERS - Brent crude futures LCOc1 were at $69.23 a barrel at 0808 GMT, up 8 cents from their last close, but down from a high of $69.37 earlier in the day. Brent on Monday rose to $70.37 a barrel, its highest since December 2014, the start of a three-year oil price slump. U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $63.84 a barrel, down from a high of $63.89 earlier, but up 11 cents from their last settlement. WTI hit $64.89 on Tuesday, also the highest since December 2014.