Page 8 - GLNG Week 02 2021

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it does not need consensus from its OPEC part- by Saudi Arabia even as some other members of
ners to make major moves, while its regional the group raise their output.
nemesis Iran continues to award contracts in But US shale drillers – which have become
pursuit of higher oil production. known for their ability to respond quickly to
The Kingdom’s energy minister, Prince oil price fluctuations, are treating the rally with
Abdulaziz bin Salman, apparently took every- caution. Indeed, a handful of shale company
one by surprise when he announced a 1mn bpd CEOs have pledged restraint over the past few
production cut for February and March follow- days, including the heads of Devon Energy, Pio-
ing Russia and Kazakhstan being given room to neer Natural Resources, Occidental Petroleum,
make small increases. Cimarex Energy and Ovintiv.
While Saudi output will be reduced to Occidental’s president and CEO, Vicki Hol-
8.119mn bpd, Iran has continued announcing lub, has said her company’s focus is currently
contract awards to local firms as the Islamic on debt reduction – unsurprisingly given the While Saudi
Republic seeks to raise its own production by company’s high debt load following its acquisi-
around 355,000 bpd, and has committed nearly tion of Anadarko Petroleum for $38bn in 2019. output will
$3bn to the endeavour. The latest set of contract Devon, which just completed its acquisition of
awards are for mainly smaller fields, having pre- WPX Energy, is aiming to keep production flat be reduced
viously focused on larger assets. compared with levels it achieved in the fourth
Meanwhile, Tehran is anticipating comple- quarter of 2020. And Ovintiv’s CEO, Doug Sut- to 8.119mn
tion to be reached shortly on the first devel- tles, described flat production as being “the new bpd, Iran has
opment phase of the Azar oilfield, allowing growth” during a virtual conference hosted by
production from the field to expand to 65,000 Goldman Sachs last week, calling for the shale continued
bpd. The project has been stuck at 97% since industry to show discipline.
October, with a cumulative total of more than This was echoed by Cimarex’s CEO, Thomas announcing
$1.7bn having been spent so far. Jorden, who said during the Goldman Sachs
To the west, neighbouring Iraq is in talks with event that his company would be “highly disci- contract awards
Jordan over the renewal of their crude supply plined in setting a budget”. to local firms.
agreement that was signed in February 2019, Pioneer, for its part, is maintaining its initial
providing for the export of 10,000 bpd of oil production growth target of just 5%, unchanged
to be trucked from Iraq’s Baiji refinery into the despite Saudi Arabia’s production cut.
Hashemite kingdom. “I never anticipate growing above 5%
under any conditions,” Sheffield said during
If you’d like to read more about the key events the Goldman Sachs event. “Even if oil went to
shaping the Middle East’s oil and gas sector then $100 a barrel and the world was short of sup-
please click here for NewsBase’s MEOG Monitor . ply,” he said, the economics would not support
adding rigs because service costs would cut
North America: Shale drillers proceed with into margins.
caution Given the ongoing wave of shale industry
Oil prices have rallied, reaching levels not seen consolidation, there are fewer companies left to
since February 2020, with West Texas Interme- buck the trend in any meaningful way.
diate trading above $53 per barrel as of January
14. This is partly the result of OPEC and its allies If you’d like to read more about the key events shaping the
reaching an agreement last week that will see an North American oil and gas sector then please click here
overall production cut extended until April, led for NewsBase’s NorthAmOil Monitor. ™

P8 www. NEWSBASE .com Week 02 15•January•2021