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  • wilfrid02144
    BP s Browne Sees Energy Prices Stabilizing and Even Falling Long Term Intelligence Press Tuesday, November 29, 2005 World energy demand will continue to
    Message 1 of 1 , Dec 1, 2005
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      BP's Browne Sees Energy Prices Stabilizing and Even
      Falling Long Term Intelligence Press
      Tuesday, November 29, 2005

      World energy demand will continue to grow, but new oil and natural
      gas discoveries ramping up across the globe will likely lead to
      stabilized prices and perhaps even a dip in the long term, the CEO
      of BP plc said Tuesday.

      John Browne spoke to the Brookings Institute in Washington, DC, to
      tout BP Alternative Energy, a low-carbon power business that was
      launched on Monday.
      However, the BP chief touched on a lot of energy subjects at the

      The energy industry needs to plan for the future, he said, but added
      there remained plenty of new opportunities for exploration and
      production, pointing to recently discovered oil and gas deposits in
      the Caspian Sea, Angola, Russia and "here in the U.S. from the
      deepwater of the Gulf of Mexico," he added.

      "Across the industry, investment which has gone in over a period of
      years is leading to new production. And beyond those projects which
      are already under way there is more to come -- not least here in the
      U.S the development of gas in the Rockies, where we announced a
      $2 billion investment plan a few weeks ago, and the major long-term
      development of the 35 Tcf of natural gas in Alaska, which will add a
      whole new source of supply to the U.S. market. That's why despite
      continued growth in world demand we see the prospect of prices
      stabilizing and perhaps even falling back to a lower level."
      Browne acknowledged that "things could happen. But the increase in
      output from diverse sources of supply begins to restore the cushion
      of capacity."
      Today's high oil prices "are unlikely to be sustainable and should
      drop to average $40/bbl in the medium term,"
      and longer term, prices could return to a range of $20-25/bbl, he
      said. Browne did not comment on gas prices, which traditionally have
      traded at a 6:1 ratio with oil; however, he said recovery of shut in
      Gulf production following the 3Q hurricanes is expected to pressure
      prices lower, and "I wonder what will happen when it all comes on."
      The CEO also updated the status of BP's deepwater semisubmersible
      Thunder Horse platform, originally scheduled to ramp up this year.
      The $1 billion platform, in which ExxonMobil Corp. holds a 25%
      stake, will process up to about 250,000 boe/d, but a defective
      ballast system caused it to begin listing after Hurricane Dennis
      crossed the Gulf in July. The ramp up was delayed into 2006, and
      production likely will begin next summer.
      "Thunder Horse is fine," Browne told reporters following his
      speech. "The problem is, of course, the weather has been so bad we
      can't connect it up to the wells on the seabed...We do expect to do
      this next year, and we expect it to be on stream in the second half
      of next year, probably in the earlier part of the second half."
      Copyright 2005 Intelligence Press Inc.
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