"I know you are a long-term oil bull
I am presently cautiously bullish on oil though quite concerned about its short to medium term prospects in case of a significant downturn. <g>
As to Lord Browne, his comments are not new. He made very similar comments last year:
economicsuk.com
Sunday, June 19, 2005
”… Lord Browne, BP’s chief executive, recently told the House of Lords that the era of $20-a-barrel oil was over and for the immediate future, prices would remain above $40.
After that, however, he looked forward to a period, perhaps three to four years hence, in which higher output would come from the Caspian, Angola and from expanded capacity in some of the Opec states. “Over the longer term, the abundance of resources, interfuel competition, and the potential to employ more energy-efficient technology suggest that prices much above $35 are not sustainable for very long periods,” he said. …”
Looking at his comments over recent years reveals a little more about his views and I don't think you would have made a lot of money had you listened to him:
"The Times (London)
November 7, 2001, Wednesday
... Lord Browne said that Opec was producing about a million barrels per day beyond its quotas and predicted that demand might not increase next year. He said: "Opec has some thinking to do. ..."
"Petroleum Economist
January 19, 2004
... BP also sets its oil price assumption at a level at which most of its projects would survive - $16/b. Gas-price forecasts were raised in early 2003 from $2.40/'000 cf to $2.70/'000 cf. But it has nonetheless maintained a conservative public demeanour. The firm's chief executive, John Browne, has warned investors against seeing underlying market fundamentals as strong, despite recent price strength. In addition, he has distanced BP publicly from its mid-cycle assumptions. "It is increasingly clear that the cycle is impossible to predict and so we should think of them as standardised assumptions that give us a base line, ..."
"Financial Times (London, England)
September 22, 2004 Wednesday
... But oil companies diverge on the need to get into such projects. Lord Browne, BP's chief executive, rules out any big investment by BP in Canada's oil sands and GTL. "There are tons of opportunities and if there aren't today, there will be tomorrow, ..." he says."
"Sunday Times (London)
October 3, 2004, Sunday
... Most confusing of all are the statements by those who should know what is going on in the oil markets: the chief executives of the major international oil companies.
Lord Browne, chief executive of BP, denies there is a worldwide shortage of oil.
He told the Financial Times: "There isn't really a supply crunch at the moment... Supply can be forthcoming in significant quantities. Opec is being very determined and if you look at non-Opec capacity additions, they're going to come on pretty strong starting at the back end of the year." Not so, responded David O'Reilly, the chief executive of ChevronTexaco: "There is a lack of spare capacity out there."
And the differences of opinion among the industry's top executives relate to future prospects as well as to the current situation. Browne says the Opec countries are quite capable of expanding output without help from international oil companies. But Lee Raymond, Exxon's boss, told a meeting of Opec officials that the world's growing need for oil could be met only if the international oil companies were allowed to explore in the producing countries now closed to them. ..."
In addition, you should also contrast Lord Browne's statements with what the CEO of Total, Thierry Desmarest said:
today.reuters.com
" "The capacity of raising (oil) production is a real challenge ... if we stay with this type of production growth our impression is that peak production could be reached around 2020," Thierry Desmarest told the World Gas Conference in Amsterdam on Wednesday.
If demand growth was cut to 1 percent from the nearly 2 percent experienced in recent years, the point of peak output could be postponed by 10 years, the French oil major's CEO added.
"We say to governments, it's urgent to take action plans to reduce oil demand growth," Desmarest said."
Based on my information, this is the earliest peak oil prediction by a major oil company exec. |
