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Middle East: OPEC+ aftermath Texas Intermediate (WTI) above $40 per barrel,
The aftermath of the most recent OPEC+ meet- is compelling at least some US producers to start
ing is still playing out. restoring some of the output they have curtailed
Having reached agreement, OPEC has now since March.
moved to ensure that countries match their Analysts are estimating that up to 500,000
promises and has levied additional cuts on coun- bpd of US shale production, or around 25%
tries who failed to meet their quotas in May. High of what has been shut in since the downturn
on this list are Iraq, Kazakhstan, Nigeria and started, could return to the market by the end
Angola; the first two countries are said to have of June. “With prices where they are now, if they
come up with agreed proposals; the remainder stay above $30 [per barrel], I wouldn’t expect
were due to commit by Monday. A full report on any significant curtailments from us in Q3 or
the outcome of these talks is anticipated soon. beyond,” Devon Energy’s CEO, David Hager,
One country that has moved to respond to said at a JP Morgan energy conference last week.
the effects of the oil price collapse is Saudi Ara- However, oil prices of around $40 per barrel
bia, whose oil giant Aramco is planning major are anticipated to continue acting as a brake on
staff cuts and is pulling back on developing its oil new drilling, even as some existing production
and gas deposits. is restored.
These moves follow a drastic fall in revenue, Continental Resources is also among the
which has hit its balance sheet, and the pullback companies saying that it will start to restore some
marks a rare pause in Aramco’s efforts to drill of its output in response to current crude prices.
wells, discover fields and expand known depos- The company said it expected to bring back
its to replace the barrels being pumped from its around 20% of its shut-in production in July.
conventional oil reserves. The return of production is not limited to
After last week’s positive talk about Yemen shale plays. ConocoPhillips – which has both
raising its crude oil production by 25%, matters shale and conventional operations – has also
have come back down to earth with the occu- said it is considering restoring some of its cur-
pation of the island of Socotra by the Southern tailed volumes, which account for about a third
Transitional Council (STC), which was sup- of its production, over the next few months. This
posed to be part of a power-sharing agreement includes a plan to restore 100,000 bpd of shut-in
with the government. Small steps of progress are production in Alaska by July.
threatening to unravel. But as US production is being restored, there
are warnings that this could complicate global
If you’d like to read more about the key events shaping efforts, including those by the OPEC+ group, to
the Middle’s East oil and gas sector then please click stabilise crude prices by restricting output.
here for NewsBase’s MEOG Monitor.
If you’d like to read more about the key events shaping
Mixed fortunes for US mega-projects the North American oil and gas sector then please click
The relative stability of oil prices, with West here for NewsBase’s NorthAmOil Monitor. ™

P10 www. NEWSBASE .com Week 25 25•June•2020