Business | Oil & Gas
Energy producers in driving seat
Consumer countries and international oil firms keen to gain greater access to the world's energy resources are likely to walk away empty-handed from talks with producer nations in Rome.
- Reuters
- Published: 23:50 April 20, 2008
Rome: Consumer countries and international oil firms keen to gain greater access to the world's energy resources are likely to walk away empty-handed from talks with producer nations in Rome.
Record high oil, which struck $117 a barrel on Friday, has helped to drive up the profits of oil majors, but it has also increased the spending power of national oil companies and made them ever more reluctant to grant access to their resources.
"The relative positions of international energy companies and national energy companies are changing - and not in our favour," Paolo Scaroni, chief executive of Italian oil and gas company Eni said in a speech at the opening of the International Energy Forum (IEF).
Organisation of Petroleum Exporting Countries (Opec) member Venezuela, under President Hugo Chavez, has spearheaded a global trend towards resource-holders seeking to maximise their returns from their energy wealth.
International firms have found themselves faced with tougher terms and shut out of the best energy territory.
During the 1970s, the international oil companies controlled nearly three-quarters of global oil reserves and 80 per cent of production, Scaroni said.
Now, they control 6 per cent of oil and 20 per cent of gas reserves, and 24 per cent of oil and 35 per cent of gas production, he said. National oil companies hold the rest. There is little sign the trend will reverse.
But national oil companies still have some need for cooperation with foreign investors as international and national firms alike battle with cost overruns, staff shortages and the difficult of extracting oil and gas from more complex fields.
Meanehile, the world will need every form of energy available - from coal to biofuels -to keep pace with a booming population, the chief executive of Royal Dutch Shell said yesterday.
"... Despite high prices, demand is not dropping, there is only slower growth. Easy oil and easy gas cannot supply all that surge in demand," Jeroen van der Veer said.
Opec: No need 'to raise output'
The Opec sees no need to raise oil production to counter high oil prices, the Opec President said on Sunday. "No," said Chakib Khelil, who is also Algeria's Energy and Mines Minister, when asked by reporters whether Opec should raise production.
"There is a balance between supply and demand," he said, speaking during a visit to Kuwait. He said a previous output increase had failed to bring prices down.
He said Opec wanted an "appropriate" price suiting both consumers and producers, but declined to say what that price level would be.
- Reuters
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