Technoglitch
Core Member
The world’s most powerful oilman brought a harsh message to Houston for executives hoping for a rescue from low prices: high-cost producers – many of them sitting in the room – need to either “lower costs, borrow cash or liquidate.”
For the thousands of executives attending the IHS CERAWeek conference, the message from Saudi Arabia oil minister Ali al- Naimi means deeper spending cuts, laying off more roughnecks and idling drilling rigs.
“It sounds harsh, and unfortunately it is, but it is the most efficient way to rebalance markets,” Naimi said.
As many as 74 North American producers face significant difficulties in sustaining debt, according to credit rating firm Moody’s Investors Service
“Shale oil in the United States, I don’t know how we are going to live together,” Abdalla Salem El-Badri, OPEC secretary- general, told the same conference in Houston on Monday. Naimi made clear, however, he knew how OPEC would coexist with high cost producers like shale: putting as many companies as possible out of business.
While Naimi insisted that Saudi Arabia wasn’t at war with shale, or any other producer, he was clear in his aim. “We are doing what every other industry representative in this room is doing,” he told the audience. “Efficient markets will determine where on the cost curve the marginal barrel resides.”
“It’s going to be really, really ugly to get through this valley,” Papa said.
https://www.energyvoice.com/oilandg...cers-to-cut-costs-or-get-out-of-the-business/
For the thousands of executives attending the IHS CERAWeek conference, the message from Saudi Arabia oil minister Ali al- Naimi means deeper spending cuts, laying off more roughnecks and idling drilling rigs.
“It sounds harsh, and unfortunately it is, but it is the most efficient way to rebalance markets,” Naimi said.
As many as 74 North American producers face significant difficulties in sustaining debt, according to credit rating firm Moody’s Investors Service
“Shale oil in the United States, I don’t know how we are going to live together,” Abdalla Salem El-Badri, OPEC secretary- general, told the same conference in Houston on Monday. Naimi made clear, however, he knew how OPEC would coexist with high cost producers like shale: putting as many companies as possible out of business.
While Naimi insisted that Saudi Arabia wasn’t at war with shale, or any other producer, he was clear in his aim. “We are doing what every other industry representative in this room is doing,” he told the audience. “Efficient markets will determine where on the cost curve the marginal barrel resides.”
“It’s going to be really, really ugly to get through this valley,” Papa said.
https://www.energyvoice.com/oilandg...cers-to-cut-costs-or-get-out-of-the-business/
