OPEC Ceding Global Swing Status
OPEC's decision this month to maintain existing oil output will fail to push rival producers out of the market because rising global crude demand should soon lift prices and boost drilling activity, North Dakota Governor Jack Dalrymple said.
Since November, the Saudi Arabian-led cartel has held to a policy of unconstrained output, an approach many suspect is designed to flood global markets with more crude, push prices lower and punish rivals, including North Dakota, the second-largest U.S. oil producer.
"It's not surprising that Saudi Arabia would finally make a decision that they are not going to be the sole equalizer of supply and demand around the world," Dalrymple said in an interview with Reuters this week at his capitol office. "They are going to expect other countries to be part of controlling supply."
Yet the strategy seems to have backfired, as producers have had to become leaner and more efficient, steps that allow them to profit despite the more than 40 percent drop in prices over the past year.
At the same time, Dalrymple said he's glad oil prices have fallen from around $100 per barrel roughly a year ago to about $60.
"Looking back, people are realizing that the $100 price level probably hung on longer than it should have," he said.
With global demand for oil rising, North Dakota - which produces about 1.4 percent of the world's oil each day - and other shale oil states likely will have to boost production soon, rather than slowly watch it dip, as has happened in recent months, Dalrymple said.
"Those two forces will come together at some point, hopefully not too far in the future, and we're going to have a stable price situation," he said.
Dalrymple praised recent safety rules from the United States and Canada that will require thicker hulls, among many other standards, to improve the safety of crude-by-rail transport.
"I think the improvements are very good," he said. "The biggest factor in safety of transport are the cars themselves."
Iraq Oil Revenues Fall Short of Budget Projections
Iraq’s Prime Minister Haider al-Abadi says despite remarkable hike in the country’s crude oil production, the oil revenues have not been high enough to cover budget projections.
Speaking in a televised interview, Abadi said the country’s oil revenues are even lower than the figure projected in the country's austere budget for 2015, AFP reported.
"So far, our oil revenues are below what was passed in the budget," Abadi added, without providing exact figures on the shortfall.
Abadi's remarks came in spite of the previous reports, which showed that the country has registered the highest level of crude oil exports in decades during the recent months.
On May 2, Iraqi Oil Ministry announced that the country’s oil exports climbed to 3.077 million barrels per day (bpd) in April, compared to 2.98 million bpd in March.
According to a statement by Iraq’s Oil Ministry, the country exported a total of 92.8 million barrels of crude oil in March and brought in USD 4.8 billion in revenue, at an average selling price of USD 51.7 per barrel.
Iraq's parliament approved the country’s annual budget of 119.5 trillion Iraqi dinars in January (about USD 99.6 billion at that time).
The budget was about USD 3 billion lower than the original figure that had been approved by the Iraq’s cabinet a month before. The fall in budget was blamed on the current slump in price of oil, on which the government is almost completely reliant for funds.
Qatar Vast Gas Reserves 'to Last 138 Years
Qatar's gas reserves are so vast it can maintain production at current rates for another 138 years, according to an official report.
An "Economic Commentary" from the Qatar National Bank (QNB) said the vast reserves of the tiny Persian Gulf country will ensure it maintains its prominent position in the hydrocarbon sector "for years to come".
It added that "Qatar has enough gas reserves to maintain production at current rates for 138 years".
"Looking forward, Qatar is expected to maintain its dominant role in the global hydrocarbon sector," read the QNB report.
"Global demand for clean energy is expected to continue rising, and Qatar is a leader in the Liquified Natural Gas (LNG) market."
Qatar is the third largest producer of natural gas in the world behind the United States and Russia.
Globally, it accounts for just over five percent of the market.
LNG is gas cooled to -160 degrees Celsius when it then turns into a liquid, allowing it to be more easily transported.
The vast reserves of gas have helped fuel Qatar to becoming one of the richest countries on the planet.
The QNB report was using figures contained in BP's Statistical Review of World Energy, released earlier this month.
That review by the British multinational showed that UK imports of LNG in 2014 increased by 20.5 percent.
QNB is a bank half-owned by the Qatar Investment Authority, Qatar's sovereign wealth fund, and the rest by the private sector.
Statoil to Cut 1,500 More Jobs
Norway’s energy giant, Statoil, is planning in the next phase of its efficiency program to cut between 1,100 and 1,500 permanent jobs by the end of 2016 in a bid to increase efficiency and competitiveness of its operations.
The announcement came amid plunging global oil prices, which have made the Norwegian company slash up to 7 percent of its workforce by the end of next year, AFP reported.
Sources at Statoil also noted that a further 525 consultant positions will be also cut, promising that further alterations to the company’s organization will come at the end of the month.
This is not the first time that the company, which is 67 percent state-owned, is laying off workers as it cut 8 percent of its staff last year, reducing it to 22,500.
"We regret the need for further reductions, but the improvements are necessary to strengthen Statoil's competitiveness and secure our future value creation," chief operating officer, Anders Opedal, said in the statement.
The company launched a program to improve cost and capital expenditure back in 2013 with the main goal of dealing more efficiently with industry-wide cost and competitiveness challenges and to generate USD 1.7 billion in annual savings starting from 2016. The program was announced by Statoil last year when oil prices were still above USD 100 per barrel.
Since that time, oil prices fell to below USD 50 per barrel, though they have recently recovered a bit and are now standing at around USD 60. The global oil drop has pushed energy companies to accelerate cost-cutting measures and suspend or scale back investment plans.
In February, Statoil announced that its annual profits had decreased in half due to tumbling oil prices. The company also declared a 10-percent cut in its USD-20-billion investment budget for this year.