As expected OPEC quota stays at 30 mbpd!

As widely expected and in line with market expectations, the 163rd OPEC meeting of ministers ended with the 12 members of the oil exporting club keeping their official collective production quota right where it was – at 30 million barrels per day (bpd).

 

OPEC noted that the “relative steadiness” of crude oil prices during 2013 (to-date) was an indication that the market was adequately supplied, with “the periodic price fluctuations being a reflection of geopolitical tensions.”

 

However, the cartel felt that whilst world economic growth was projected to reach 3.2% in 2013, up from 3% in 2012, downside risks to the global economy, especially in the OECD region, remain unchecked.

 

OPEC said that world oil demand is expected to rise from 88.9 million bpd in 2012 to 89.7 million bpd in 2013, driven “almost entirely” by the non-OECD regions. It also projected non-OPEC supply to grow by 1.0 million bpd.

 

OPEC Secretary General Abdalla Salem el-Badri said, “Taking these developments into account, the second half of the year could see a further easing in fundamentals, despite seasonally-higher demand. In light of the foregoing, we have in decided that member countries should adhere to the existing production ceiling of 30 million bpd.”

 

El-Badri was not prepared to discuss the individual members’ quotas, a figure which OPEC no longer releases for publication. The Secretary General also revealed that no agreement was reached over the election of his successor with the same three candidates – viz the two protagonists Majid Munif (Saudi Arabia) and Gholam-Hussein Nozari (Iran) with compromise candidate Thamir Ghadban (an Iraqi official) – being in the frame.

 

“The candidates remain the same, but if a fresh name comes up then we will examine his/her credentials in the usual way,” the Secretary General said. In his response to the debate about shale’s impact on OPEC members’ fortunes and a possible rise in their spare capacity, El-Badri said the impact of unconventional oil production remains uncertain and if it resulted in a rise in OPEC’s spare capacity then there was no reason to be alarmed.

 

“I am in the business of conventional. The way I see it is that if it is a causative factor in a rise in OPEC’s spare capacity then I say why not? What’s the harm? The International Energy Agency (IEA) cannot have it both ways. Before the shale debate began, the agency expressed alarm at the perceived lack of OPEC’s spare capacity. Now when there is a perception that our spare capacity would rise, they again see it as a problem,” he added.

 

El-Badri said OPEC members would, if required, take steps to ensure market balance and reasonable price levels for producers and consumers, and respond to developments that might place oil market stability in jeopardy. OPEC said its next meeting will convene in Vienna, Austria, on Dec 4, 2013. That’s all for the moment folks! Keep reading, keep it ‘crude’!

 

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© Gaurav Sharma 2013. OPEC Secretary General Abdalla Salem el-Badri speaks at the conclusion of the 163rd OPEC meeting of ministers © Gaurav Sharma, May 31, 2013.

A superb dissection of global oil & gas depletion

Any analysis of oil and gas depletion is always tricky and often coloured by opposing arguments, disinformation, politics, tangential debates about the resource curse hypothesis and extractive techniques. Given this backdrop, veteran industry analyst Colin J. Campbell’s attempt to tackle the subject via his Atlas of Oil and Gas Depletion, currently in its second edition, is nothing short of historic.

 

This epic work banks on decades of painstaking research undertaken by Campbell in his quest to provide definitive and pragmatic commentary on the subject of depletion. Nine parts and 77 chapters split this weighty, authoritative volume on the subject; wherein part by part, page by page it examines oil and gas depletion by region and jurisdictions. Not only has geology been taken into consideration but also the political climate of each region and country in question. The author also discusses the impact of emergent technologies and the costs involved relative to each E&P jurisdiction with a separate examination of conventional and unconventional sources.

Accompanying discourse on the history of the oil and gas business is carved up into two halves – the first half discusses the formation of the oil industry, which oversaw (or rather fuelled) the exponential growth of the global economy. The second half talks of a contraction as the easy to extract supplies dwindle, and the barrel spent per barrel extracted equation starts getting more and more worrying.

 

Campbell also discusses reporting practices and industry data interpretation techniques. The Atlas switches seamlessly to a country-by-country analysis in alphabetical order by continent. Every country imaginable in the context of the oil and gas business and even those that are unimaginable in mainstream discourse about our 'crude' world are examined, substantiated by industry data and accompanying graphics.

 

For purposes of reviewing the contents, the Oilholic selected 10 jurisdictions commonly associated with the E&P industry and another 10 jurisdictions, hitherto considered net oil importers. This blogger was quite simply blown away by sincerity and effort of the research, along with the brevity with which jurisdictional summation was provided duly taking each country’s 'crude' history into the equation. As a reader, you appreciate a book when it adds to your knowledge; Campbell’s Atlas certainly did it for yours truly.

 

If you are looking for an authoritative analysis of oil and gas depletion, minus caricature, clichés and political statements, but full of rational and apolitical scrutiny of the costs involved with extracting oil and gas, then look no further than this book. For an evolving industry, which has a finite natural resource as its core offering, Campbell’s Atlas of Oil and Gas Depletion is likely to stand the test of time.

The Oilholic is happy to recommend this book, and humbled to provide a review for the research conducted by an analyst of Campbell's credentials. The Atlas will educate and inform those interested in the oil and gas industry's future and the challenges it faces – be they existential or commercial. In particular, those professionals involved with policymaking, petroleum economics, history of the oil and gas business, academia and market analysis.

 

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© Gaurav Sharma 2013. Photo: Front Cover - Campbell’s Atlas of Oil and Gas Depletion © Springer 2013