OPEC is dead, Rosneft’s head Igor Sechin has told reuters. In
a fine example of stating the obvious – at least to those who have been keeping
an eye on the energy industry – and putting it in context, the chief of
Russia’s largest oil company welcomed an era where the oil market will be
driven by “finance, technology and regulation.”
Russia and OPEC are natural rivals, although there has been a
sense of partnership, especially after the advent of shale in the U.S., when both
started pumping more and more crude to preserve their market share.
It was Russia that tried earlier this year to negotiate a
production freeze with OPEC, and while some smaller OPEC members were ready to
sign on the spot, the organization’s leader, Saudi Arabia, blew the proposal
off, demanding that Iran also take part in the freeze.
This was an embarrassing moment for Russia, and in his email
to Reuters, Sechin made a point of noting that Rosneft was always against this
move, with perfectly reasonable skepticism.
Riyadh has boasted repeatedly that it can wait out the price
slump. Of course, the success of this strategy would depend on the length of
the slump, but Saudi Arabia has deeper pockets than Russia. Saudi Arabia also
has a new economic development program that involves a move away from oil.
The Saudis have all but said outright that their national
priorities in energy would always trump OPEC priorities. The country has
repeatedly used its influence as the largest producer in the organization to
dictate the energy policies of smaller producers, which has been harmful for
the latter. And these policies, which can be summed up as “pump as much as you
can, don’t let the shale boomers get a breather” have not led to a clear
victory. They have not led to a sharp rise in prices, which was expected to
take place after the shale producers throw in the towel. But U.S. shale
companies have lasted much longer than expected.
Saudi Arabia knows that OPEC is dead. It’s reached the end of
its productive life. On Tuesday, Aramco’s chief executive said that the company plans to increase its gas production
twofold over the next 10 years. Aramco is betting on gas, and with a very good
reason: it’s the cleaner hydrocarbon, and the global economy should start
recovering and expanding soon, so gas demand is set for steady growth, at least
according to the latest Medium-Term Gas Market Report by the International Energy
Agency.
In light of the priorities laid out in the Vision 2030 plan, it becomes clear that Saudi Arabia no longer
needs OPEC. It’s striking out on its own to try and overcome its “oil
addiction.” Without Saudi Arabia, which alone pumps some 10.27 million barrels
per day (as of April), the rest of OPEC are likely to go their separate
ways as well.
Though Sechin did not exactly mourn it, the demise of the cartel
that dictated the oil market is not necessarily good news for Rosneft and
Russia. If Saudi Arabia gets the know-how to develop its gas reserves, it could turn into an important rival for
Russian, as well as Iranian gas. It’s possible that natural gas will overtake
crude in terms of demand in the future. Perhaps an OGEC will replace OPEC?
In the meantime, though, plans were announced to ramp up oil production. Apparently, nothing is
certain as of yet, aside from the clear fact that OPEC will never again be
reborn into its former glory.
Sincerely Yours
Trison Siahaan
Tidak ada komentar:
Posting Komentar