DUBAI — Gulf Arab national oil companies (NOCs) should transform into competitive international oil companies (IOCs) like their European and Asian peers BP, Statoil and Petronas have done, a Gulf Intelligence survey conducted in London with 100 energy industry executives, says. 73% of the audience held this opinion and when asked what the dominant industry partnership model would be by 2025, 63% of executives chose NOC- IOC, while 31% said it would be predominantly between NOCs. Only 6% voted for the IOC-IOC option.
The dramatic 70% decline in oil prices since mid-2014 has spurred significant restructuring activity in the past year amongst some NOCs in the region – geared to improving commercial and operational efficiencies and altering the traditional reliance on IOC financial and technical expertise.
Asked where they saw Brent crude oil prices averaging in 2017, 72% said in the $50s per barrel (bbl) range; 18% were more bullish, seeing it average in the $60s/bbl, while 10% were more conservative, predicting that as it did in 2016, Brent would average in the $40s/bbl.
63% of the GIQ survey audience were of the opinion that absolute Brent prices would not dip below $40/bbl while 20% were somewhat less optimistic choosing $30/bbl as the floor for 2017. Meanwhile, 5% thought it could touch $20/bbl or below.
Brent prices have averaged in the $50s/bbl this year and were $56/bbl at the market close on Friday. 75% of the executives in the room said that the OPEC – non OPEC Vienna 1.5 million b/d production cut agreement which commenced in January, was a result of producers feeling unsustainable economic pressure. — Gulf Intelligence
from consistently lower oil revenues, while the remaining 25% believed that the market share strategy deployed by OPEC for the past two years had succeeded in its objective. Meanwhile, 83% of the audience expect the current 6-month agreement to be extended beyond June of this year. — Gulf Intelligence