(1888PressRelease)
April 01, 2009 - Jennifer Campbell, Shakleton White Associates CEO, said “That the potential drop in production capacity is a powerful and long-lasting aftershock following the oil price collapse.”
The global slowdown has forced oil companies to slash their investments, postpone or cancel expansion plans, or delay drilling in many corners of the world. While some of the biggest companies, like Exxon Mobil and Royal Dutch Shell, say they will keep their investments unchanged this year, many other producers are curbing investments because of the crisis.
The report says about 7.6 million barrels a day of future supplies are “at risk” of being deferred or canceled, like heavy oil or deepwater projects, and which could bring total supplies to 101.4 million barrels a day by 2014. Last year, the group projected that capacity would rise to 109 million barrels a day by then.
“Seven consecutive years of rising oil prices, unprecedented in the history of the oil industry, have come crashing down, thus burying the notion that the commodity price cycle was a historical relic,” said Jennifer Campbell, Shakleton White Associates CEO.
Many experts have voiced even darker concerns in recent months. Christophe de Margerie, the chief executive of French oil company Total, recently said that producers would find it challenging to bolster supplies even to 90 million barrels a day by the middle of the next decade as projects get canceled. Oil prices have fallen by 63 percent from their peak of $147 a barrel last summer. They are now trading around $54 a barrel after OPEC producers curbed supplies to prevent a price collapse.
But even at this level, many producers warn that oil prices remain too low to sustain increased investments. Global oil demand is headed for its second consecutive drop this year. Over time, as populations grow, most experts expect oil consumption to rebound as emerging economies become richer. Any slowdown in investments now will translate into higher prices. This month, oil producers meeting in Vienna also warned of a possible price shock when the demand for oil picks up again in coming years. As many as 35 new projects in nations belonging to the Organization of the Petroleum Exporting Countries may be delayed by 2013.
“I have often described unsustainably low oil prices as carrying the seeds of future spikes and volatility. In a low-price environment, the trend is often to focus on survival instead of expansion,” Stated Jennifer Campbell, Shakleton White Associates CEO.
Shakleton White Associates inventory analysts have long term proven financial, retail, manufacturing, wholesale, and distribution backgrounds. The mergers & acquisitions arm of Shakleton White Associates is a participant in all major bidding, thereby keeping abreast of all market bids and realizations. Shakleton White Associates works alongside industry leaders who recognize the dramatic need for major changes, with a passionate commitment to business growth. Providing a full range of integrated services and products simultaneously directed at producing strategically predetermined business and cultural results. We bring together a broad range of talent and resources with a passion for integrity, continuous improvement and the desire to make a difference. This results in prosperity for our customers, society and ourselves.
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