Petro-Canada managers expect “a challenging year for the petroleum industry worldwide” in 2008, with volatile energy prices, unpredictable industry inventories, wild weather and unusual political developments.Company leadership made its predictions in their annual report, in which leadership asserts “concern about a U.S. recesion” has “put a lid on potential further increases in international oil prices”.
“For the first time in several years, questions are being raised about the ability of China to maintain both the extraordinary economic and oil demand growth rates, which have been sustaining the oil price increases of recent years, should its key export markets go into economic decline,” a discussion paper from management read.
Management was leary of more nations hiking royalties and pointed out that lowly gas prices — which made for the cheapest power outside of coal in 2007 — was succeptible to a recession taking hold in North America. Most homes in the company’s Canadian base are heated by natural gas, although Canadians can opt to heat by wood, electricity, oil heating pump.
In their analysis, company managers said they stil saw that lower prices for natural gas would at least attract less liquefied natural gas supplies, keeping Canadian prices buoyant.
Against the backdrop of volatile prices, the company is still underway with a $5.3 billion capital spend targeting production in Libya this year, n 2009 at White Rose off Eastern Canada and by 2010 in Syria, where a front-end engineering study is expected finished within days, the prelude to contract awards at the Ebla gas project.
Source: Scandinavian Oil & Gas
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