Oil prices stabilising, gas taking centre stage
by Jonathan Wongjonathanwong@theborneopost.com. Posted on May 19, 2014, Monday
KUCHING: Foreign direct investment abandoned emerging markets and made a beeline back to the traditional safe havens in the US, causing local currencies to weaken and interest rates to rise as the risk of inflation resurfaced.
On the geopolitical front, the world experienced far-reaching events from the re-emergence of a more assertive Russia, to the election of the moderate Hassan Rouhani and Iran coming in from the cold.
Oil prices, often closely correlated with geopolitics, fluctuated from a low of US$94 per barrel to well above US$110 per oil barrel but overall appeared to be more stable than the geopolitical situation warranted.
In the oil patch, Hassan Assad Basma executive director and chief executive officer for Bumi Armada Bhd (Bumi Armada) said 2013 will be remembered for several critical and far-reaching developments.
“The dawn of the gas age has taken a small but decisive step forward after the approval of several west coast of North America liquified natural gas (LNG) export terminals and Petroliam Nasional Bhd (Petronas) final investment decision (FID) of the floating LNG (FLNG) one and two projects.
“Elsewhere, the decision by Petrobras and its partners to go ahead with the development of the giant Libra field in Brazil and Cobalt Energy‘s launching of the Front End Engineering and Design (FEED) for the Cameia field in Angola, promise to open up new pre-salt plays in Brazil and West Africa,” he said.
The CEO added this provided the FPSO and Subsea industry with continuous and challenging work for decades to come.
“The Libra field alone is expected to provide a banquet of more than 20 floating production storage and offloading (FPSOs).
“In the North Sea, EnQuest PLC’s decision to go ahead with the Kraken heavy oilfield development promises to unleash 20 billion barrels of heavy oil and infuse a new lease of life into the mature North Sea market.”
The reserve recovery ratio (RRR) of International Oil Companies (IOCs) dropped noticeably as their capital expenditure (capex) soared, prompting the IOCs to slow down their major projects and redirect their investment dollars.
The National Oil Companies (NOCs) and Independents fared better, registering growth in their required rate for return.
A much revived industry is eagerly anticipated in Mexico as Petróleos Mexicanos (Pemex) and the newly elected government managed to change the constitution in favour of opening up their oil patch to foreign direct investment.
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