Arab Today, arab today opec looks oil and gas revolution
Last Updated : GMT 04:33:33
Arab Today, arab today
Arab Today, arab today

Opec looks oil and gas revolution

Arab Today, arab today

Arab Today, arab today Opec looks oil and gas revolution

London - Arabstoday

Opec\'s conference last week at Hofburg Palace seemed an exercise in luxury, with lavish flower arrangements funded by Ecuador and a delicately tuned three-course lunch sponsored by Saudi Aramco.There was ample reason to celebrate: last year, Opec countries raked in US$1 trillion (Dh3.67tn), their highest ever take from oil. But listen to the ministers and a less optimistic mood emerges. Worries about a weakened global economy have pushed the price of Brent crude below $100 a barrel, considered by many ministers an acceptable price floor, and there are fears that the financial turmoil could further erode demand. Competition for Opec, the supplier of 40 per cent of the world\'s oil, is rising as new technologies unlock previously inaccessible hydrocarbons in such varied locations as the Russian Arctic and the oil-bearing shale of North Dakota - a state that now produces more than the Opec member Ecuador. \"Oil and gas consumption are moving east; oil and gas production are moving west,\" Hasan Qabazard, the director of the oil-producer group\'s research division, told Opec delegates and executives gathered in Vienna for the organisation\'s biannual seminar. The secretariat is at work on a special report for its members on the effect of shale - all part of the group\'s attempt to preserve its role as the arbiter of oil amid rapid change. By 2035, the group expects its share of the market to have dropped slightly to 38 per cent from 40 per cent, on top of the decline in oil\'s share of the world energy mix. Officials take different views on the cocktail effect of growing non-Opec supplies and the struggling world economy. Some, including Dr Qabazard and some oil executives, believe demand growth in emerging markets will outweigh the decline in developed economies. By 2035, $20tn in investments will be required just to meet the demand for oil and gas, says Ryan Lance, the chief executive of ConocoPhillips. But Saudi Arabia, Opec\'s biggest producer and home to most of the group\'s spare capacity, is preparing for a more modest scenario and has called off plans to expand its production capacity. \"I believe demand in the future will peak before supply,\" says Ali Al Naimi, the Saudi oil minister. \"Whether Saudi Arabia will need more than 12.5 million bpd [barrels per day] capacity has yet to be demonstrated. \"It will take some time to see what is going to happen to demand but, obviously, with what is happening in the oil and gas field and also the quick technological development of renewables, I question that Saudi Arabia will really need to think, at least for now, about additional future production capacity.\" The uncertainty for demand for Opec crude poses a threat to nations that have increased spending, spurred by record profits and a desire to appease citizens in the wake of the Arab Spring. Estimates of the oil price Arabian Gulf countries require to balance their budgets range from $80 to $107, giving them little room to manoeuvre should prices continue to fall. \"It just happens that as the oil price went up and up and up, the countries implemented social policies in Saudi Arabia, in Algeria, in all of them, because they have tremendous needs for their population,\" says Chakib Khelil, the former oil minister of Algeria. \"To balance their account they need higher and higher prices.\" Those prices are threatened by the onset of plentiful shale gas, which has already lowered the price of gas in the US to $2 per million British thermal units, down from a 2003 high of $20. Translated to its oil equivalent, crude would trade at $13 a barrel - just one sixth the current price of West Texas Intermediate, says Paolo Scaroni, the chief executive of ENI, an Italian oil company. \"The current situation will not last,\" he told ministers. \"Whether gas price will go up or oil prices will go down, it is only a matter of time.\" Questions about the long-term impact of the Fukushima nuclear disaster in Japan last year, Chinese appetite for US gas, and whether consumers will take to using natural gas as a transport fuel will help determine the ultimate impact of shale gas on oil demand, he added. Qatar, the world\'s top supplier of liquefied natural gas, is watching the shale transformation closely. \"Could such a game-changer even happen in the oil industry, too?\" asked Mohammed Al Sada, the Qatari oil minister.from gulfnews.com

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Arab Today, arab today opec looks oil and gas revolution Arab Today, arab today opec looks oil and gas revolution

 



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