Page 8 - GLNG Week 25

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

P8 www. NEWSBASE .com Week 25 26•June•2020