Marc Greenberg writes:
>If I were the CEO of a big oil company, thinking in the long-term, I would want to reduce my dependence on politically unstable regions. It follows that exploration in the Gulf, the North Sea, etc., should be a priority.<
WRONG.
Oil/Gas companies are generally good at coping/managing within a political unstable environment. They have been doing so for many years.
Understand this, the cards are held by the lowest cost producers, i.e., Middle East producers. As product prices drop, the high cost producers- those having deep water plays, higher cost North Sea production, HTHP fields, etc., will re-align their budgets in those basins to de-emphasize drilling. Following this, rigs involved with these high cost plays will begin to drop their day rates as they attempt to maintain share in a shrinking market.
It's an old bloody story.
-John Guild, P.E.
|
