Anyone have a guess where this guy is coming from?????
BP's Browne sees sharp fall in oil prices-Spiegel
Sat Jun 10, 2006 9:18 AM ET
BERLIN, June 10 (Reuters) - Oil prices could fall to around $40 a barrel in the medium term and drop further in the long run on the back of steadily rising supplies, John Browne, the chief executive of BP Plc <BP.L> said in a magazine interview.
"We cannot really count on oil prices easing very much in the near future," said Browne in an interview with weekly Der Spiegel to be published on Monday.
"But is is very likely that oil prices will range in the medium term around an average of $40 (per barrel). In the long run it could even be $25 to $30."
Brown said that large new fields were still being discovered, in the vicinity of the Caspian Sea for example, while western Africa and Russia still had huge reserves. The extraction of crude from oil sands also bore great potential, he added.
"I expect that the free capacities will increase soon again," he said, adding that higher exploration costs would not hamstring the increase as they still only accounted for a small fraction of the sales price.
Additionally, technological development meant that the amount extracted from oil reserves would also increase.
"In the past we managed to get out 20 to 30 percent, at the moment it's maybe 40 to 45 percent," he said. "I can see no reason why we could not reach 50 or 60 percent."
Browne said that while working with Russia as a gas supplier meant facing certain risks, co-operation had been good because both western countries and Russia relied upon each other.
"Even at the height of the cold war we never had any supply problems. Interest are mutual, Europe will continue to rely on Russian gas and the Russians need their customers in the West."
Browne said he currently met Alexei Miller, head of Russian gas monopoly Gazprom <GAZP.MM> <GAZPq.L>, once a month.
"Lately we spoke about gas production in eastern Siberia for the Chinese market. The time that this project will be realised has come closer," Browne said.
While Browne said it was hard to forecast how much energy would come from renewable sources, European consumers could become the driving factor.
"Consumers are ready to pay for the protection of the environment. In Europe more and more people get green electricity despite coming at a higher price," he said.
"Ten years ago this would have been unimaginable."
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