Oil prices empower Arabs


Market carve-up underway? It would be only natural if Gazprom sought to agree with its rivals in North Africa and the Middle East to a set of commercial terms that facilitate the carving up of markets, ensuring everyone gets a share of the pie, the article added.

Crude price starting to damage majors: Among the West’s big oil companies, the price of crude has gone beyond a mere embarrassment of riches to the point where it is damaging business plans. So hot is the market that companies struggle to staff projects and acquire materials and equipment.

Their costs are soaring: BP recently suffered a tripling in the day rate of its drillship in the Gulf of Mexico. In Qatar, they are no longer worrying about tender prices but about a lack of bids. There are simply not enough equipment procurement contractors to service the profusion of projects.

Their market dominance is eroding: The surging price is doing damage in other areas for the major oil companies, causing political problems at home and abroad. Oil producing nations no longer need the oil majors to provide either cash or technology. The latter they can buy from oil service companies, which have picked up the staff and skills abandoned by the majors during the price collapse of the 1990s. Flush with funds from high prices, the oil producing nations also no longer need the oil majors’ capital.

The Australian, 27/4/2006, p. 25

Source: Erisk Net  

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