OPEC Revives Projects Now that Oil Prices Have Recovered
Today OPEC announced that some 150 projects are now moving forward to increase annual production by 12M barrels by 2030. Of those projects, some 35 were canceled/delayed and have now been restarted (other reports suggested that 135 projects were delayed). Either way the E&C firms should see higher order rates in the near future if true.
Another big issue during the crisis was financing and I'd expect with oil maintaining at these levels that will soon disappear as an issue as well.
- Members of Opec, the oil exporters’ group, have revived the oil projects they put on hold when oil prices collapsed to close to $30 dollars a barrel early last year, writes Carola Hoyos in Cancun.
- Abdalla El-Badri, Opec’s secretary-general, said all 35 projects that had been delayed or considered for cancellation were back on track. He said that Opec’s member countries now had a total of 150 projects under development, which would add about 12m barrels per day of oil production capacity by 2014.
- The 35 projects that have been restarted are expected to contribute about 5m barrels per day of that capacity. They have been revived following the recovery of oil prices in the past year to about $80 a barrel. Mr El-Badri said: “They are all back on track.”
- Speaking to the Financial Times ahead of the International Energy Forum meeting of oil-producing and consuming countries in Cancún, Mexico, he played down the delay caused by the year-long uncertainty on oil prices.
- The reversal is also a sign of Opec’s optimism about future oil demand growth, especially in Asia. Oil demand in developed countries that are members of the Organisation for Economic Co-operation and Development is expected to decline.
- “We hope the prospect for the future will be better than it is now,” Mr El-Badri said. “We base our projection not mainly on OECD countries: 80 per cent of the growth that we see in the future will come from India and China, and the Middle East and Asia as a whole.”