Speaking at the Howard Weil Energy Conference in New Orleans last month, Schlumberger Chairman and CEO Andrew Gould described 2004 as a a year of ‘consistently broken records.’ These included an oil price high of $55.67 in October, US oil demand topping 20 million bbl/day and record land rig activity—all in all ‘the most favorable business climate we have seen in the upstream industry since the early 1970s.’
Under-investment
Gould noted that under-investment in all parts of the industry means that ‘tight supply and volatile prices are likely to remain with us for a number of years’. New supplies from Central Asia and the deepwater will not happen quickly enough to correct the situation and restoring a ‘comfortable margin’ of supply will take a number of years.
Fighting
Gould opined that the oil service industry was ‘not in particularly good shape’ to meet the challenge of a rapid increase in activity with aging rigs and equipment and little spare capacity. A shortage of specialized E&P professionals means that ‘industry is fighting over the core of professionals that remain.’
© Oil IT Journal - all rights reserved.