The head of “Rosneft” Igor Sechin believes that shale oil has a good chance on the transition path of moderate growth, but the expected dynamics of the market it would not be “explosive” character, as it was in 2013-2014, reports news Agency “Finmarket”.
“After the price of WTI at about $ 45 per barrel began to stabilize and even some production growth. It is not yet sustainable and ambitious nature. Further development will depend on price dynamics and price stability. Shale oil has a good chance on the transition path of moderate growth, but the expected dynamics of the market it would not be “explosive” character, as it was in 2013-2014,” he said on Thursday, speaking at the Eurasian forum in Verona (Italy).
However, as explained by the head of Rosneft, in large measure, it will retain the regional character of the phenomenon, contributing to the balance of oil and oil products on the largest market in the US.
Sechin also believes that the second quarter of 2018 the price of a barrel of black gold will exceed $ 55. “In the coming months we should see the completion of the period of excess supply in the market and the beginning of normalization of the situation with commercial oil reserves, he said. In this period, despite some recovery in oil production in the United States, the overall level of oil production in the country will remain below the maximum for 2015. The price of oil exceeds $ 55 per barrel.”
In his opinion, will remain low level of investment activity in large and complex projects, especially developing the “majors”, as the economy of these projects requires a more stable and higher prices.
The head of the largest oil company of Russia said that almost all forecasts, including the calculations performed by Rosneft, showed at the horizon 2040, additional growth in oil consumption in the daily change is not less than 15 million barrels.
“Subtract from this expected experts additional to the current production volumes of shale oil optimistic estimate of 6-8 million barrels per day. And add volume to the natural 5-7% reduction of production at the fields, came to a Mature stage, more than 30 million barrels. a day. As a result, we can obtain the need for additional production capacity not less than 40 million barrels per day. Thus, in this perspective to meet the energy needs of the world economy needs to find ways to extract new oil volumes, four times superior to the current production of Saudi Arabia,” – said Sechin.
“In terms of oil supply would like to additionally point out a few factors. In 2015 the budget deficit in Saudi Arabia has left 15% of GDP – the highest level since 1987. Despite fiscal consolidation, in 2016 the budget deficit will amount to 10-12% of GDP. This level is not sustainable even for a five-year horizon. Saudi Arabia requires either drastically reduce the level of expenditures, primarily due to a decline in employment or increase the level of oil revenues,” said he.
“This was the incentive to change, most recently, the position of this country – the transition from the struggle for the expansion of market share to seek allies in stabilizing market prices,” – said the head of “Rosneft”.
He also noted that he sees a variety of opportunities for European businesses in the course of working with Russian partners on all space of Eurasia. “Rosneft”, according to Sechin may invite the European partners projects $ 100 billion in the course of the development of relations along the power bridges “Russia – Europe” and “Russia – Asia Pacific”.