INDUSTRY NEWS “The Earth Is Not Running out of Oil and Gas”, BP Says Oil and gas companies have invested heavily in squeezing the maximum from existing reservoirs by using chemicals, super computers and robotics. The halving of oil prices since last June has further dampened their appetite to explore for new resources, with more than $200bn-worth of projects scrapped in recent months. By applying these technologies, the globally proved fossil fuel resources could increase from 2.9 trillion barrels of oil equivalent (BOE) to 4.8 trillion BOE by 2050 , nearly double the projected 2.5 trillion BOE required to meet global demand until 2050.
US Shale Oil Production Decline
UAE’s Gulf Energy to Purchase Share in US Helium Gas Field
The decline of US shale oil production is to continue with a projected drop of 116,000b/d in February, adding to an overall decline of about 640,000b/d since the production peak in March 2015. Shale oil production has dropped over crude prices collapse and analysts predict that seeing a fall in oil prices to $20 a barrel is possible. As a result, drilling companies have idled 64% of their oil rigs and will keep undermining the levels of shale production in months to come. Some analysts estimate that around 50% of US shale oil producers could go bankrupt before the crude market reaches equilibrium.
Gulf Energy Corporation has signed an agreement to purchase a share in the deep gas development well in the US state of New Mexico to be drilled in 2017. The field has proven reserves of helium gas in commercial quantities. Global demand for helium gas has increased since 2013, making it an attractive investment opportunity.
Aramco Will Not Reduce Oil and Gas Investments Saudi Aramco announced that it would not reduce its new investment in oil and gas production capacity despite the financial strain caused by low oil prices. Aramco’s Chairman, Khalid Al-Falih, explained that the company had been able to cut costs enough to maintain the current levels of investment. He said that Saudi Arabia could survive a low oil price for “a long, long time.” “The objective of the Aramco IPO sale was not to generate cash for the Saudi government, but to promote the Saudi private sector”, Al-Falih insisted, according to Trade Arabia. He added that global oil supply and demand will eventually balance at a “moderate” price.
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F E B R U A R Y 2016
