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Oil price to limit output rise in the americas by drtyhjk dfcvb
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Oil price to limit output rise in the americas |
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Business,Business News,Business Opportunities
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CALGARY, Alberta- Oil production in the Americas is expected to climb only slightly this year with previous outlooks for Canada and Brazil looking too rosy after a collapse in crude prices turned an industry boom to bust.Production in the Americas looks set to rise in 2009 by a net 100,000 barrels a day, or 0.5 percent, to 20.98 million barrels a day -- about a quarter of total estimated world output -- according to Reuters calculations based on a surveyAny gains will be from big-ticket projects where companies invested most of the capital before oil prices tumbled to under $40 a barrel from highs above $147 in the second half of last year, such as a few Canadian oil sands developments.Only last year, pricey unconventional resources and Brazil's massive offshore oil finds were trumpeted as bright spots for crude output growth in the hemisphere.But costs of materials and labor went through the roof, then oil prices and credit markets fell through the floor, making those reserves even harder to access.That, along with steep production declines in Venezuela and Mexico, has prompted a stark conservatism in forecasting."Part of it is the slowdown in spending, and also trying to anticipate delays and downtimes that get extended a little bit," analyst Martin King of Calgary-based FirstEnergy Capital Corp said. "Plus, with the lower prices you're going to be losing barrels on the conventional oil side as well." of governments, investment banks and consultants.Production in the hemisphere fell 4 percent in 2008, to 21.55 million barrels per day from 22.46 million in 2007, according to figures from the U.S. Energy Information Administration and UBS, lagging predictions for an increase of 0.7 percent in last year's Reuters survey.Clawed-back expectations are against a backdrop of slackening oil demand in leading global consumer the United States and around the world as economies sputter.The International Energy Agency said this week that the slew of deferred projects could mean a supply crunch after 2010, assuming economies and energy demand recover.SHIFTING OIL SANDSCanada's National Energy Board expects a 0.7 percent gain to about 2.7 million bpd. It rose by the same percentage in 2008, well off predictions of as much as a 7 percent increase.Canadian Natural Resources's (CNQ.TO) C$9.7 billion ($7.7 billion) Horizon project and Nexen's (NXY.TO) C$6.1 billion Long Lake, Alberta, venture started up last year and their oil sands output is expected to creep up through 2009.That will help offset declining conventional production with nearly all companies reining in capital spending.Since oil prices tumbled last year, more than $80 billion of new oil sands projects have been canceled or put on hold. In Brazil, state oil company Petrobras (PETR4.SA) expects to end 2009 pumping just over 2 million barrels a day.
It aimed for that last year but delays in securing rigs and technical problems at major new oil fields made the goal elusive.Adriano Pires, head of Brazilian Infrastructure Center, says he is skeptical of Petrobras' forecast."Last year they changed their production targets three times and this year could be the same thing. The management wants to please the government and sets targets they cannot meet," Pires said.U.S. production is expected to be unchanged or slightly higher due to big Gulf of Mexico projects -- BP Plc's (BP.L) Thunder Horse, slated to ramp up through 2009, and Chevron Corp's (CVX.N) Tahiti, scheduled to start up later this year.MEXICO, VENEZUELA DECLININGIn key U.S. supplier Mexico, the government said output will be unchanged at 2.75 million bpd as big investments in the unconventional Chicontepec onshore area offset declines at the aging Cantarell oil field.Analysts are not so sure.
Many doubt state oil company Pemex has the technical capacity needed to develop Chicontepec, which is believed to hold billions of barrels of oil in more than two dozen low-pressure fields.Pemex plans to spend $2.3 billion there in 2009 and officials reject the notion that falling oil prices will force it to slash investment since the government has hedged 2009 net oil exports at $70 a barrel.In Venezuela, where President Hugo Chavez has spent the past few years grabbing back oil interests from foreign companies, market experts say output is 20 percent below the official figure of 3 million barrels per day.The OPEC nation faces falling production as it builds up huge debts with drilling and oil field service companies as slumping revenues leave it unable to meet its obligations.An extended slump in oil field activity is likely hit output hard, especially in Venezuela's older fields that require constant maintenance to prevent production declines.($1=$1.26 Canadian). I am an expert from China Telecommunications, usually analyzes all kind of industries situation, such as black opal ring , men titanium ring.
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