Oil industry experts remain optimistic despite low prices

MANAMA: Dr. Abdul Hussain bin Ali Mirza, Minister of Energy, during the opening session of the 19th Middle East Oil and Gas Show and Conference (MEOS 2015) said that oil industry has had proven over the current decade to be resilient taking the ups and downs in its stride, growing in spite of the adverse price scenarios.

“The current prices are at similar levels as those seen before and we expect that the prices will rebound once again as they did in the previous period, regaining the optimism for the region,” the Minister told the packed house during the Ministerial panel at the Ritz Carlton Hotel and Spa.

The Middle East, he said, as the traditional key-suppler to the world is ready to face the challenges that may come up as predicted by certain market analysts. |We continue to plan long term, we continue to invest more in technology and we are forging ahead in creating global partnerships and alliances, leveraging on the strengths of partnering countries. Thus I believe that the conference theme ‘Energy beyond limits through innovation and collaboration’ is most appropriate and timely.”

“Employing advanced technology in the entire supply chain from upstream or downstream, and building successful business partnerships in new ventures is of paramount importance in the ever-changing business environment.”
“It gives me great pleasure to welcome you all to the Kingdom of Bahrain to take part in the 19th, in the series of MEOS conferences that was first held in 1979. Throughout its history, this event grew to become what is considered to be the premier event in the industrial calendar.”
“I would like to take this opportunity to once again convey our gratitude to the Prime Minister, His Royal Highness Shaikh Khalifa bin Salman Al Khalifa, the patron of this event, as he has done for many years. His Royal Highness’s support throughout the years has strengthened this event to become a showcase for the region and the industry.”
“The Kingdom of Bahrain takes great pride in hosting this premier biennial conference and exhibition, which brings together experts in the field and exhibitors from all corners of the world who are conveying the latest, the technology, has to offer in this field to over 8000 visitors.”

“This year, once again, new records are expected to be set in terms of the papers submitted, papers presented, countries participating and most importantly the number of visitors both local and overseas. The large turnout of participants and exhibitors again this year proves that the oil and gas sector remains robust in spite of the recent environment of low oil prices.”

“Although the oil and gas industry is at the crossroads once again, with falling prices engendered by the production surplus, I am sure; we will be wiser from the lessons learnt from the past. The philosopher, poet and novelist, George Santayana, said “Those who cannot learn from history are doomed to repeat it” Two-thousand five hundred years ago the Greek philosopher Heraclitus aptly stated.
“Nothing endures but change.” He must have clearly had in mind the oil industry in our decade.
“The past few years have seen historic changes in the global oil market. On the demand side, oil consumption has been steadily shifting eastward to the tigers in Asia. On the supply side, growth from unconventional resources has reshaped the global oil market.

“For example, despite market conditions, the rapidly expanding refinery sector in China and other eastern countries have already caused fundamental changes in the refining landscape in the OECD region, leading to many refinery closures. This trend is expected to continue to influence global energy markets for years to come.”

“On the other side, despite the increasingly challenging environments and exacting producing horizons, the upstream industry continues to meet ambitious undertakings head-on and meeting the world’s energy demand through innovative and collaborative efforts and essential partnerships among National Oil Companies, International Oil Companies, Oilfield Service Companies, Technology Providers and Academia.
“The primary game-changer, as modern parlance goes, that has impacted the industry most profoundly in the recent decade, is the shale oil and gas revolution that has taken place in the United States. The major oil consumer in the world, who used to import as much as 60% of its oil needs, has become an exporter.
“This has had profound impact on the supply-demand balances, and hence on the prices we are experiencing currently. There are other shale games in other parts of the world, potentially adding more supplies. However, this explosion in supplies, attended by low prices, does not come without any repercussions.”

“Shale oil projects do pose a great environmental challenge and the cost of production is high relative to conventional production. For instance, analysts estimate that The Tuscaloosa Marine Shale (TMS) that lies along the border of Louisiana and Mississippi has some of the nation’s highest breakeven costs—about $70 to $90 a barrel for benchmark West Texas Intermediate crude—according to energy investment banking firm Tudor Pickering Holt. It is inevitable then to hear about recent decisions by shale oil players to curtail investments.

“Another potential game-changer, which had recently received a reprieve (depending on which side of the fence you are sitting) by President Obama’s veto, is the famous Keystone XL Pipeline Expansion Project. This project is designed to transport crude oil from the Canadian tar-sands in Alberta to Steele City, Nebraska.

“This pipeline is considered a critical infrastructure project for the energy security of the United States and for strengthening the American economy. Yet, the pipeline is temporarily blocked due to environmental considerations.

“As an environmentalist myself, I tend to agree with the president. However, as the Energy Minister of an OAPEC member country, I tend to oppose the decision from a supply-demand viewpoint.

“While on the subject of project delays, one would be amiss if one did not mention the Arctic region. Several countries and governments, as well as environmental groups are battling in legislatures and in the judicial systems the application by several majors to drill in the Arctic– the last frontier for oil and gas drilling. The court is still out on whom or when this battle will be won.”

“I just mentioned some of the key mega-projects that are happening around the world. I will now turn my attention to our home – the Kingdom of Bahrain. Our projects are not comparable in terms of scope, investment outlay or impact on the global oil markets. But in our own way we are contributing modestly in all areas of the oil and gas supply chain.

“With the continued growth of Bahrain’s economy, and as envisioned in our economic plan, Bahrain Vision 2030, we are exploring opportunities to secure energy for the future by encouraging sustainable joint ventures in the energy sector that I will be talking about during the Ministerial Panel Session.

“You have the unique opportunity to visit the displays from an impressive list of 300 exhibitors from 30 countries showcasing the latest advances in technology, equipment, software and instrumentation.”

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