This excerpt is from The Oil Depletion Analysis Centre (ODAC) March 9th Newsletter. How do you say “net exports”?
ODAC: “And what of Saudi Arabia on which so much hope continues to rest? Brad Bourland, Chief Economist for the Jadwa Investment Company struck a warning note on a CERAweek panel with regard to the growing pressure caused by rising domestic oil demand in the Kingdom. On current trends he said that “By 2030, Saudi Arabia would require a break-even price for oil of about $320 per barrel to balance its budget”. This was especially interesting in view of a warning on Tuesday from Saudi oil minister Ali Al Naimi that “In light of such unpredictable fluctuations (in the oil market)…we should depend on oil revenues, products and various usages to create other sources of economic growth and prosperity” – this from a man for whom $28/barrel was a fair price for the future in 2004.”
This will be hard to reconcile with the two IEA graphs in this week’s report. It also hits at the same issue Mark Lewis wrote about in Deutsche Bank report on oil exports covered in the February 17th issue of this report.
While I am sure they were not responding to the Master Resource Report’s comments last week on Mexico’s net exports what they said this week is still interesting.
Bloomberg: “Petroleos Mexicanos, the world’s third-largest oil producer, expects output from its aging Cantarell field to gain this year, allowing the state-owned company to boost production for the first time in eight years.”
If history is any guide at all on this don’t place any bets on this happening. Over the last 8 years the price of oil has gone up over fivefold and Pemex has been unable to do anything about Cantarell’s production decline. As the Bloomberg article went on to mention their record is dismal at best.
“Mexico has sought to stop declining output at Cantarell, the world’s third-largest field when it was discovered in 1976, by injecting gas and using other recovery methods. In the past decade, Cantarell’s production slid 74 percent to 500,674 barrels a day last year, dragging the country’s daily output to its lowest level since 1990 of 2.55 million barrels.”
Bloomberg interview with Juan Jose Suarez Coppel, chief executive officer of Petroleos Mexicanos. He makes one brief comment early about internal demand growth.