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Speaking candidly to MEES on the sidelines of the OPEC meeting in Vienna a senior Saudi official says the country’s role as a swing producer is finished. He envisages an “eventual” end to Saudi energy subsidies and touts a new gas find.
The kingdom does not believe that shale oil producers could withstand a fall in oil prices to $70/B, the official tells MEES. Nor does the kingdom necessarily agree with the International Energy Agency’s assessment that shale oil production will peak in 2020 and then decline.
“That will depend on [advances in] technology. If the price falls, one cannot imagine how much technology would be involved in getting shale oil and shale gas out [profitably]. What they have invested will continue but it’s a very short life. They have to keep drilling all the time. They are not going to continue drilling at $70 or $80/B. We can survive. We have no problem. All this garbage that we need $90 is nonsense. That’s why I’m very optimistic.” (CONTINUED - 1133 WORDS)