Home' Trinidad and Tobago Guardian : April 2nd 2015 Contents APRIL 2015 • WEEK ONE www.guardian.co.tt BUSINESS GUARDIAN
ENERGY | BG9
The downturn in the oil and gas industry could
cost New Mexico around 2,000 jobs, according
to estimates from officials with the state Energy,
Minerals and Natural Resources Department.
The number of drill rigs operating in the San
Juan and Permian basins has dropped from 85
to 60 over the past year, and state energy Secretary David
Martin said each rig directly employs 50 workers and another
50 to 70 in support jobs.
"So far we haven t seen a decrease in oil production in New
Mexico, but we expect it to begin leveling off and that means
lost revenue and jobs in the coming months," he said Tuesday
during an annual energy conference in Farmington.
The reduction in rigs comes as some producers scale back
plans to compensate for dropping oil prices, which have fallen
from more than US$100 per barrel last summer to less than
US$45 in mid-March.
While it can take months for the effects to trickle down to
the oilfield workforce, state lawmakers have already been forced
to pare down spending plans for the next fiscal year due to
less tax revenue from the industry.
Industry leaders participating in the conference said the
lower prices are forcing them to be more innovative and more
Companies are leaning on new techniques and technology
to get more oil out of every well they drill and cutting costs
in an effort to keep US oil competitive with much lower-cost
oil flowing out of the Middle East, Russia and elsewhere.
Daniel Fine, associate director at the New Mexico Institute
for Mining and Technology s Center for Energy Policy, said
a price war by OPEC will prolong the industry s troubles and
there s no indication things will be better next year.
"Saudi Arabia has made a historic decision to no longer
support oil prices. It s now survival of the fittest," he said.
David Lawler, the CEO of BP America s onshore business,
announced Tuesday at the conference that the company has
no plans to sell its assets in the San Juan Basin, which include
thousands of operating and idle natural gas wells.
BP hasn t drilled a well in the basin in about seven years,
but Lawler said the company has plans to drill two wells this
year, with eight more in other basins in the country.
Experts: New Mexico oil patch could lose 2,000 jobs
Oil prices should stabilise in the sec-
ond half of this year and rise in
2016 and 2017 as consumers
respond to a period of much cheap-
er fuel, a Reuters poll of analysts
showed on Monday.
The survey of 34 analysts predicted North Sea
Brent crude would average US$59.20 a barrel in 2015,
up from around US$55 so far this year. The forecast
is up just 20 cents from the projection in last month s
Brent is expected to rise to US$72.10 in 2016 and
US$78.70 in 2017, the poll showed.
Oil prices fell more than 60 percent between June
2014 and January, and although they have recovered
a little since then, they are still around half their level
a year ago.
This has encouraged motorists to make more use
of their cars and let factories and other businesses
boost fuel consumption.
London-based consultancy Energy Aspects expects
world oil demand to rise by up to 1.5 million barrels
per day this year. That s double the rate of oil demand
growth seen last year, according to the International
"Strength is broad-based," Energy Aspects analyst
Virendra Chauhan told Reuters Global Oil Forum.
"On-road diesel demand has continued at a stellar
Intesa Sanpaolo analyst Daniela Corsini agreed,
saying the rise in consumption appeared to be world-
"Global oil demand will surprise upwards, driven
by the United States, China and emerging Asia,"
Increasing demand should help absorb any extra
oil coming onto the market from Iran, if it can agree
a nuclear deal with the West that would bring an
end to sanctions.
And some analysts see demand outstripping sup-
"The global market is expected to move into supply
deficit in the second half (this year), with that deficit
reaching one million bpd in the fourth quarter," Stan-
dard Chartered analyst Paul Horsnell said.
Standard Chartered, one of the most bullish banks,
expects Brent to average US$76.00 in 2015.
Twenty of the 32 analysts who contributed to both
the February and March Reuters polls left their 2015
Brent forecasts unchanged. Six of them increased
their outlooks, with equal numbers seeing lower
European investment bank Barclays raised its Brent
forecast for 2015 by US$7 to US$51, the biggest increase
by any contributor.
The poll forecasts US light crude will average
US$53.60 a barrel this year and US$66.50 in 2016.
Reuters poll: Oil
prices to stabilise
as demand rises
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