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Oil Rises As New Saudi Oil Minister Hints At Further Cuts

Oil Rises As New Saudi Oil Minister Hints At Further Cuts

Saudi Arabia reassured oil markets…

BP Sees No Sign Of Oil Supply Shortfall Due To Underinvestment

BP

UK supermajor BP doesn’t expect global oil supply shortages in the coming years because of reduced investment, Brian Gilvary, BP’s Group Chief Financial Officer, said on Thursday.

“We’re not seeing under-investment coming through yet,” Gilvary said at the FT Energy Transition Strategies summit in London, as quoted by Reuters.

“If we start seeing a drop off in production in the Lower 48 [U.S. shale] that might be a cause of concern,” Gilvary said at the summit.  

Earlier this year, Saudi Aramco’s president and chief executive Amin Nasser said that the industry would need to invest more in exploration, after record-low discoveries last year. Oil firms will have to meet not only growing energy demand but will have to offset with new discoveries a large natural decline in mature oil fields, Aramco’s top executive said in Houston in March.

According to Nasser, the industry—which has already lost US$1 trillion in investments during the downturn—needs more than US$20 trillion over the next 25 years to meet rising demand for oil and gas.

More recently, higher oil prices and lowered development and project costs have led to cautious optimism and measured risk-taking within the industry that is set to see an uptick in global oil investment this year, energy consultants Wood Mackenzie say.

While much of the investment increase is happening in U.S. onshore—with shale companies lifting 2018 budgets by 15-20 percent in response to higher prices—conventional oil project investments around the world are also coming back, especially in top offshore areas where project economics are competitive with U.S. tight oil, says Simon Flowers, Wood Mackenzie’s Chairman and Chief Analyst.

For offshore developments, Norway is leading the pack, Rystad Energy analysts said earlier this year. Norway was the largest contributor to offshore developments in 2017 with US$18 billion worth of projects, followed by the United States and Mozambique, the analysts noted.

By Tsvetana Paraskova for Oilprice.com

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  • citymoments on June 15 2018 said:
    BP CFO gave the reason for why under investment in oil E&P is not an issue: lower 48 production shale oil production and investment is strong. This is a such misleading and unprofessional statement, the reason is shale oil is only about 10% of global oil production, what about the other 90% of oil production : conventional on shore and off shore productions had drastic decreasing capital investments because of last a few years lower oil price and lower oil stock equity prices, that is why place like Mexico, Venezuela all had significant production declines as well as lots of off shore projects cancellations. I have no idea why the CFO of BP tries to talk down the oil price based on twisted facts.
  • Me on June 14 2018 said:
    "“If we start seeing a drop off in production in the Lower 48 [U.S. shale] that might be a cause of concern,” Gilvary said at the summit."

    Really? BP must be the only entity on earth that doesn't see it (pipeline constraints) coming...later this year.

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