Officials from Russia"s two largest oil companies OAO Rosneft and OAO Lukoil, last week said they aimed to grow output in 2009.
A decade ago, oil companies cut investments after crude fell as low as $10.72 a barrel. That led to restrained supply capacity, which boosted prices to a record $147.27 on July 11 last year. Eight months later, the situation is totally different. The severe economic crisis flattered demand for oil and sank crude prices to levels under $50 per barrel. Now the ghost of oil underproduction in the coming years has returned. This fear is one of the most sound OPEC"s arguments when it is discussing about its future production policy.
According to OPEC"s leadership ?prices below $50 a barrel are ?too low? because they don"t allow producers to invest in expanding capacity?. This is true, and is not just a speculative response to the falling prices. Except oil major production nations, major oil companies are cutting their investments on new fuels or to increase their production in future.
The combination of low prices and financial crisis do not allow huge spendings in new investments. But this, creates a very dangerous scenario. When the world economy recovers, the production maybe will not be able to satisfy demand. And this could send the fragile economy back in to a new recession, an energy crisis this time. If this scenario becomes a reality, both economy and the shipping market, not only the tanker sector that is directly connected with oil demand, will suffer again.
OPEC members have every reason to worry, and they are not alone. Russia, worries too. Russian overall output fell for the first time in a decade last year. It may fall by almost 8 percent by 2013 without measures to spur investment, Russian Energy Minister Sergei Shmatko said on Feb. 12.
Officials from Russia"s two largest oil companies OAO Rosneft and OAO Lukoil, last week said they aimed to grow output in 2009. Rosneft, which is chaired be Sechin, plans 2 percent growth. Lukoil plans a 1.5 percent gain this year.
Russia"s third- and fourth-largest producers TNK-BP and Surgutneftegas both plan flat production.
By their side, major oil companies trimmed their investments for future production in order to save money, reduce their cost and support their shares. Following is a list of oil and gas projects and oil refinery expansion plans that have been delayed so far in 2009 according to Reuters Factbox. The global financial crisis, falling oil demand and a slide in prices have prompted many in the industry to scale back spending and delay projects.
* March 20 - Kuwait said it scrapped a tender to build a $15 billion refinery project, the second multibillion-dollar major deal to be cancelled in three months after facing opposition in parliament.
* March 17 - Royal Dutch Shell Plc said start-up of the Perdido platform in the Gulf of Mexico had been pushed back to the beginning of next year from this November.
The Forcados Yokri and Bonga North West projects in Nigeria which were due to come onstream sometime during 2010 or 2011 will now come onstream in 2012 or later. Bonga North West is being re-tendered.
The Motiva Port Arthur refinery expansion is now expected to be completed in 2012 or later, rather than 2010 as earlier planned.
The Pearl GTL plant in Qatar could also be delayed. Shell said it was expected onstream "at the very end of 2010 or early 2011" rather than late 2010 as earlier targeted.
* Feb 3 - Marathon said it would delay the completion of a 15,000 barrel per day expansion at its Detroit refinery to mid-2012 in an effort to cut spending. The project had been scheduled for completion in late 2010.
* Jan 28 - ConocoPhillips said it would defer refinery upgrade projects at two of its plants to reduce capital spending, but did not identify which projects.
* Jan 27 - Leading U.S. refiner Valero Energy Corp said it was cutting capital spending in 2009 by $800 million by delaying construction of a diesel hydrotreater and aromatics unit at its Norco refinery in Louisiana and the upgrade of an FCC at its Memphis refinery in Tennessee.
* Jan 22 - Peru's state-owned energy company Petroperu S.A. has placed under review a $1 billion plan to modernize its Talara refinery because of low crude oil prices, Peru's mining and energy minister said.
* Jan 20 - Suncor Energy Inc, Canada's No. 2 oil sands producer, halts construction of its C$20.6 billion oil sands expansion called Voyageur, including the planned upgrader and new stages of its steam-assisted production operation known as Firebag.
* Jan 19 - The $2.2 billion Al Dur power and water project in Bahrain is delayed. The Al Dur project is 50 percent owned by the Gulf Investment Corp, with France's GDF Suez owning the other 50 percent.
* Jan 17 - Canada's Enbridge Inc shelves plans for a C$346 million ($277 million) pipeline reversal that would have shipped 170,000 barrels per day of oil sands crude from Sarnia, Ontario, to a tanker port in the state of Maine, supplying refineries in Montreal en route and replacing the imported oil the line now carries.
* Jan 13- Russian oil pipeline monopoly Transneft said contractor problems caused by the global financial crisis pose a threat to its launch of a major oil route to China this year.
* Jan 9 - Suncor delays a C$120 million expansion of its St. Clair ethanol plant at Sarnia, Ontario, scheduling completion for 2011 instead of late 2009.
* Jan 8 - Ecuador plans to delay some gas and oil projects while it seeks loans and investment to boost its key sector.
* Jan 5 - North Sea gas pipeline operator Gassco says the 10 billion crown ($1.81 billion) Skanled gas pipeline project to Scandinavia could be delayed from its planned 2012 launch, partly due to worries over investment plans by British chemicals group Ineos, a key client.