A look from an “industry specialist” on the rise in the price of oil in this week's “L'Usine Nouvelle” magazine.
Summary: Global oil consumption continues to rise. In 2004, it increased by 3.2% compared to 2003. With the popularity of 4-4 large-displacement cars, the development of China, India and other emerging countries, the trend will accelerate further.
Two questions dominate the market:
- What is Saudi Arabia's real production capacity, which could serve as a safety valve in the event of a crisis?
- What will be the consequences of the scarcity of investment opportunities for low-cost productions?
Saudi Arabia (whose production is exclusively the responsibility of state-owned national companies) has always claimed to have the capacity to rapidly increase (a few weeks or months) its production with a minimum of investment to be made. But reassuring statements directed at Westerners are no longer enough. No giant fields have been discovered for thirty years, the deposits are aging and extraction techniques have found their limits. With the approach of the test of truth, Saudi Arabia has just admitted that in reality it would take 2-3 years to increase production, at the cost of colossal investments, for an unsatisfactory quantity and probably oil. bad quality.
Second source of concern: the lack of investment by the “majors”. The International Energy Agency estimates at $ 6200 billion the investments that should be made in the next 25 years to hope to meet the demand. So $ 180 billion a year, or $ 50 billion more than what the oil companies are doing now. Moreover, no one knows if Yukos (Russian company) will escape bankruptcy, taking with it all of its infrastructure projects. The trend among oil companies is therefore to retreat, to buy back shares rather than hyperrisk investments with low visibility.
“The current prosperity, it is true, does not lead to painful productivity efforts in Western oil companies. Yet all of them know that they have eaten their white bread for a long time. The new areas of exploration and production, whether it be very deep seabed or very cold weather […] would require gigantic investments. No one, for the time being, wants to take enormous risks ”
Conclusion: quite disturbing.