PESGB August/September 2000
President’s Page- Richard Milton-Worssell
PETEX 2000 is 10 November, have you purchased your ticket yet? PETEX 2000 will be the biggest and best yet. The exhibition has been extended to encompass a new hall, and there is an
excellent technical programme, benefiting from joint sessions with the SPE and the IP, which have added strength and diversity. The price of oil is a subject that exercises most people’s minds these days. The oil price now (mid-Jul y) is $28, it was above $30 per barrel briefly in March, but the oil companies’ economic models seem to be stuck between $ 14 and $20 dollars per barrel
and most projects must generate positive economics at a mere $10 per barrel. The advice from those whose job it is to predict the price in 2003 is that “Future Prices, are not a predictor of the Future Price”. This is normally coupled with the sage observation that the market is very sophisticated these days ! There appears to be a belief that oil is a limitless and instantaneously
available commodity: just turn on a valve and out oil flows. Current estimates are that there are 2.7 million barrels per day spare capacity in OPEC. On 17 July OPEC announced that, production
would be raised by 500,000 barrels per day.
The price of oil is volatile, and we all know that the commodity is finite. The supply side is controlled by influences much bigger than the North Sea, but they have an interest in keeping the price
between $22 and $28 per barrel with $25 stated as the preferred price level. (See http://www.opec.org/ http://www.ipe.uk.com/ http://www.eia.doe.gov/ http://www.iea.org/)
If this is the case then why don’t we use these numbers in our economics? We claim that we are not that naive or we are too sophisticated for that, but maybe we are just being too clever? The mood, I am assured by those at the rock face, is changing, there is a new confidence out there and budgets are beginning to see more money.
As you will have read in the July Newsletter, there are staff changes within the PESGB office. The whole council and office staff are working hard to minimise disruption to members services and to prepare for the future. We can assure you that we are intending to build in a constructive way on the historic strengths of the PESGB as a society that is good value, fun and informal for all its members.
So, if you have not done so already, book your PETEX tickets now, and make sure you avail yourself of the opportunity to hear the technical programme and see the biggest technical exhibition yet. In doing so you will be able to take a view of what might be happening in 2001 .