Lukman sees lower prices refocussing attention on Middle East, North Africa
LONDON, AFX, April 26:
OPEC secretary general Rilwanu Lukman said
the lower oil price environment of the last 18
months means that international oil
companies -- which may have been
"over-optimistic" in moving into higher-cost
regions such as the Caspian Sea -- will
refocus on the Middle East and North Africa.
Even if a recovery in crude prices makes
regions such as the Caspian viable again,
"the general trend irrespective of the oil price
is towards greater liberalisation" in the Middle
East and North Africa, as governments there
are increasingly receptive to various forms of
cooperation with foreign investors in oil and
natural gas, Lukman told the annual
conference of the Centre for Global Energy
Studies.
"There is only one way it can go, and that is
towards further opening up " of oil and gas
sectors previously reserved to state
monopolies in the region, he said.
Former Algerian oil minister Nordine
Ait-Laoussine concurred that the " lowest
cost areas left in the world today are in
OPEC countries... Beyond the medium term I
do not see non-OPEC production increasing
as relentlessly as it did in the 1980s and
1990s, simply because the private sector will
have seen opportunities in OPEC countries".
The experience of Algeria has shown that
foreign investors are happy to work within
OPEC quotas where these are seen to be
supporting the selling price of crude, he
added.
However, Algeria should be regarded as a
"moderate-cost" rather than "low-cost" oil
play, Ait-Laoussine said.
Even with production costs at a
comparatively modest 3-5 usd per barrel, the
country's ability to continue to attract
foreign investment in a "much more
competitive environment" could come under
threat from countries with "equally low, if not
lower productions costs," including countries
previously restricted by sanctions,
specifically Iraq and Libya.
Ait-Laoussine noted that at present there
seem to be more international oil companies
leaving Algeria that entering it as the "fiscal
package has become more onerous".
He also deplored the fact that state oil
company Sonatrach has abandoned the
practice, introduced when he was oil minister
in 1991, of offering joint venture contracts
through a bidding process. It has reverted to
lengthy case-by-case negotiations with
potential investors, he said. |
