Oil - Oct 1
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Alarm bells on the longevity of oil wells in Saudi Arabia
Saadallah Al Fathi, Gulf News
...If these trends continue, there is no doubt that Saudi oil exports will come under pressure and will be progressively reduced. The date when Saudi Arabia becomes an oil importer may not be 2030 as Citigroup suggests or even 2040 as Chatham House suggests and many changes can be effected to prolong the life of Saudi exports.
The panic in some circles is well answered by a well-reasoned article by Mohammad Al Sabban, advisor to Saudi oil minister and chief environmental negotiator for Saudi Arabia. He shed doubt about the estimates in the reports as they assume that production and consumption trends will continue for the foreseeable future while these can and should change according to the market and circumstances.
However, Al Sabban considered these reports as a warning bell and urged that Saudi Arabia reconsiders its domestic pricing policy as a key to conserve energy and reduce consumption. He also advocated a programme for public transport within and between cities. The gas initiative must be expedited and similarly the same for the declared programme of expanding the use of renewable energy...
The writer is the former head of the energy studies department in the Opec Secretariat at Vienna
(30 September 2012)
Recommended by westexas
Doubts on Saudi Capacity May Keep Oil Volatile
Benoir Faucon, Wall Street Journal
..."The cushion to cope with supply shortfalls looks uncomfortably thin, especially in light of heightened geopolitical risks in the Middle East and Africa," Deutsche Bank said in a report Friday...
Saudi Arabia's oil minister, Ali al-Naimi, has repeatedly dismissed fears that its spare capacity wouldn't be enough to cover a major disruption.
But experts are skeptical about whether the so-called swing producer would have enough leeway to make up for a major disruption.
According to the International Energy Agency, Saudi spare capacity—the sustainable cushion of available oil it could pump at short notice if needed—was just under two million barrels a day last month, 12% thinner than for the same period last year, when Libya's output was virtually shut down...
(25 September 2012)
How High Oil Prices Will Permanently Cap Economic Growth
Jeff Rubin, Bloomberg
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies.
The countries guzzling the most oil are taking the biggest hits to potential economic growth. That’s sobering news for the U.S., which consumes almost a fifth of the oil used in the world every day. Not long ago, when oil was $20 a barrel, the U.S. was the locomotive of global economic growth; the federal government was running budget surpluses; the jobless rate at the beginning of the last decade was at a 40-year low. Now, growth is stalled, the deficit is more than $1 trillion and almost 13 million Americans are unemployed.
And the U.S. isn’t the only country getting squeezed. From Europe to Japan, governments are struggling to restore growth. But the economic remedies being used are doing more harm than good, based as they are on a fundamental belief that economic growth can return to its former strength. Central bankers and policy makers have failed to fully recognize the suffocating impact of $100-a-barrel oil...
(23 September 2012)
Total speaks out against Arctic oil
Guy Chazen, Financial Times
Total this week became the first energy company to speak out publicly against oil exploration in Arctic waters...
(28 September 2012)
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