That has become the mantra throughout the oil industry, Molchanov said. When asked about production targets for 2022 during a January earnings call, ExxonMobil CEO Darren Woods responded, “The primary objectives we’ve had in looking at the portfolio is less about volume and volume targets and more about the quality and profitability of the barrels that we’re producing.” “If someone starts drilling oil wells today, the increased supply might be 6 months, 12 months, even years away,” he said. And it will take time for them to turn that additional exploration spending into oil, Molchanov said. (PSX) expect to spend more on exploration and other capital spending in 2022, none of those companies expect to hit 2019 spending levels. To that end, while companies like ExxonMobil, Chevron Corporate strategy has fundamentally changed.” “They are under pressure from the financial community to pay more dividends, to do more share buybacks instead of the proverbial ‘drill baby drill,’ which is the way they would have done things 10 years ago. “Oil and gas companies do not want to drill more,” said Pavel Molchanov, an analyst at Raymond James. Oil surges above $110 and natural gas soars as markets 'panic' over Russia Photo by: Patrick Pleul/picture-alliance/dpa/AP Images Patrick Pleul/picture-alliance/dpa/AP The refinery in the Uckermark region processes 12 million tons of crude oil annually, according to the company, making it one of the largest processing sites in Germany. Rosneft is the largest Russian oil producer. The "Friendship" pipeline from Russia, which supplies 25 percent of Germany's crude oil, according to the refinery, ends there. More than 1100 people work at the refinery. The Russian energy company Rosneft took over a large part of the PCK oil refinery in Schwedt last year. According to the company, the supply of crude oil from Russia via the "Friendship" pipeline to the PCK oil refinery in Schwedt is currently running reliably and without any problems. Major US oil stocks have lagged behind the broader market for most of the last two years, teaching executives a hard lesson: Use the recent windfalls to reward investors, not sink more wells.Ģ5 February 2022, Brandenburg, Schwedt: At PCK-Raffinerie GmbH, surplus gas is burned off in the crude oil processing plant. The other thing keeping US production in check: investors seem to be reluctant to invest in fossil fuel stocks. “2020 is still fresh in their minds….They’re still scarred.” “They’re more confident we don’t have to worry about a bust, they’re not uncorking the champagne,” McNally said. The early days of the pandemic drove oil briefly to negative pricing, resulting in a spate of bankruptcies across the industry. Experts say the industry is unlikely to get back to that pre-pandemic level this year - and that the last decade’s rapid increases in US oil production, typically double-digit percentages year-over-year, are probably a thing of the past.Īnother factor likely making oil companies cautious about investing too much, too fast is 2020’s oil bust. They’re just not available.”Īs a result, US oil production is just under 12 million barrels a day, 8% lower than in 2019. “It’s not like they’re available at a premium price. “They can’t find people, and can’t find equipment,” said Robert McNally, president of consulting firm Rapidan Energy Group. They’re also having trouble sourcing some of the equipment they would need to ramp up production, including pipes and specialized sand used in fracking to extract shale oil. Like many industries during the pandemic, oil producers are struggling with a shortage of workers. But several issues are stopping these companies from scaling up production. Making more US oil could net a tidy profit for producers while lowering prices at the pump for drivers. And other major producers like Saudi Arabia have indicated they won’t fill the global supply gap. On the face of it, it’s an ideal time for US firms to cash in on high prices after Russia’s invasion of Ukraine: Traders are nervous about purchasing Russian oil due to uncertainty about the situation, though those exports aren’t subject to current sanctions. Oil prices are soaring to seven-year highs, but don’t expect US oil producers to ramp up supply.
0 Comments
Leave a Reply. |