“We are back to reality” | 340 (November 2017)

On October 17-19, Energy Intelligence and The New York Times co-hosted the 38th Oil & Money Conference in London. Oil Journal offers key quotes from the event.

2017-11-28 10:25 Views 744

On October 17-19, Energy Intelligence and The New York Times co-hosted the 38th Oil & Money Conference in London. Oil Journal offers key quotes from the event.

We are undeterred by the uncertain US sanctions policy and are moving forward with negotiations for a host of upstream projects designed to significantly expand our oil and gas production capacity. Priority would be given to four large onshore oil fields in the southeastern province of Khuzestan, namely Azadegan, Yadavaran, Ab Teymour and Mansouri, which have the potential to produce an extra 2 million barrels per day of crude. The Iranian opportunity for producing low-cost oil and gas provides some unique market opportunities for investors with little risk. It depends on the field and how much infrastructure is in any location, but for the fields we’re negotiating, the production cost is around $4-5 per barrel.

Amir Hossein Zamaninia, Deputy Oil Minister of the Republic of Iran

the 38th Oil & Money Conference in London

Today BP, like every company, it is on a capital diet. This means that for now Iranian projects are off the table. As for the Kirkuk oil field in Iraq, we prefer to wait until stability has returned to the region. The industry still hasn’t reached “peak diet.” Break-even costs for companies average $30-40 per barrel, but capital costs continue to come down in areas like rigs and steel. Operating costs are also falling as new technologies like Big Data enable firms to shorten project cycles with fewer staff. We began to believe that $100 was the reality, but we used to be able to make money at $25 or $20 per barrel, and we sanctioned deepwater projects at $16 not so long ago. $100 was not healthy.

Bob Dudley, BP CEO

Patrick Pouyanne

During the era of $100-plus oil in years past, the quest for resources became difficult, with national oil companies being less incentivized to bring onboard international firms that could help them drive down costs. Competition also emerged from many independent oil producers, particularly in the US, where they capitalized on high prices to finance the shale boom. Today we are back to reality. It’s quiet and so we are happy.

There is plenty of access to resources. It’s easier today for major oil companies. And I’m not a fan of a higher price. Over the past 30 months Total gained access to an additional 5 billion barrels of resources thanks to deals in Abu Dhabi, Qatar and Iran, as well as the $7.45 billion acquisition of Maersk Oil. It’s possible to be disciplined when it comes to capital intensity and to grow.

Patrick Pouyanne, TOTAL CEO

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