Seabrokers: rising costs concerning industryNews // April 4, 2014
Broker Seabrokers has echoed comment by other sources in the offshore oil and gas sector about rising costs.
Seabrokers said that, at the recent IHS CERA Week in Houston, USA, there was a recurring theme of representatives from international oil and gas companies voicing their concerns over the ever-rising cost of finding and producing hydrocarbons, while energy demand is continuing to rise rapidly.
Seabrokers reported that, in his keynote speech Andrew Mackenzie, Chief Executive Officer of BHP Billiton, stressed the importance of the free market in the marketing of fossil fuels, while he also acknowledged the issue of climate change by stressing the importance of utilising fossil fuels in tandem with the use of technology to reduce emissions.
Mackenzie indicated that global energy demand is expected to increase by 30 per cent over the next 20 years, with two-thirds of this demand coming from Asia.
While alternative sources of energy will increase in prevalence in the long-term, fossil fuels will remain the main energy source to meet this rising demand.
Seabrokers said that this sentiment was echoed by John Watson, Chairman and Chief Executive Officer of Chevron, but he further articulated the problem of an increasing number of projects becoming marginal because “US$100 per barrel is becoming the new US$20 per barrel in our business” in a situation where “costs have caught up to revenues for many classes of projects.”