The new outlook for oil: prepare for a bumpy ride in 2017

oil-glut-slider

After two and a half years of opening up the taps (or rather: not closing them) OPEC has changed course in what is looking to be a gamechanger for the oil market. Market sentiment has shifted and the oil price has gone up. But that doesn’t mean we can go back to the status quo ante, writes geophysicist (ex-Shell) Jilles van den Beukel. Some things have changed permanently. Saudi Arabia’s position within OPEC has weakened, Iran’s has strengthened. … [Read more...]

Groningen gas production and earthquakes: safety at all cost?

Gas production in the Dutch province of Groningen

Production from the giant Groningen gas field in the Netherlands has been cut drastically after increasingly heavy earthquakes began to affect the region. Some would like to see Dutch gas production stop altogether, but according to geophysicist (ex-Shell) Jilles van den Beukel Groningen gas could still play a valuable role in North West European energy supply. In the short term it offers a better compromise from a financial, environmental and … [Read more...]

Chinese national oil companies: giants built on shaky foundations

Sinopec headquarters Beijing (photo Remko Tanis)

Chinese state-owned enterprises, China’s national oil companies foremost among them, have incurred phenomenal debts – higher than the country’s total GDP. So far they have been bailed out by the government, but this just shifts the problem one level up,  to China Inc as a whole, writes geophysicist  (ex-Shell) Jilles van den Beukel. Van den Beukel explains how China’s national oil companies Sinopec, CNPC and CNOOC got into this fix and why the … [Read more...]

Oil companies and climate change: their assets are not at risk, their long-term business model is

carbon bubbles demonstration at London Stock Exchange July 2013 (photo Global Justice Now)

Global warming has fundamentally changed the business environment for oil companies, writes geophysicist Jilles van den Beukel (ex-Shell). But they will not sink under “stranded assets” or a “carbon bubble”, as some environmentalists claim. Such notions, argues Van den Beukel, are based on a lack of understanding of the value of different types of reserves. It is rather their long-term business model that is at stake. And there is probably not … [Read more...]

Why oil prices are going up – and will continue to go up

Platform moored in Mossel Bay, South Africa, June 2015, after production was halted due to fall in oil prices (photo Tim Abbott)

Oil prices are going up as oil supply and demand are approaching a more balanced situation, writes geophysicist Jilles van den Beukel. And they will continue to go up as supply is expected to fall below demand in the 2018-2020 period. The key factor in supply reduction is that cost cutting is leading to higher decline rates of mature conventional fields. So far this decline has been compensated by new oil field developments, but the current … [Read more...]

The ill-fated gas strategy of the oil majors

LNG ship leaves Darwin harbour in Australia (photo Eyeweed)

The recent focus of major oil companies on gas (and LNG in particular) may be ill-fated, writes geophysicist Jilles van den Beukel. Gas is systematically less profitable than oil. And the oversupply of LNG (and resulting low prices) is likely to last much longer than the oversupply of oil. … [Read more...]

Saudi Arabia needs realism – not a 2030 vision

Saudi Arabia's Deputy Crown Prince and Minister of Defense Mohammed bin Salman (right) (photo Ash Carter)

The recently published economic reform plan for Saudi Arabia, Vision 2030, is completely unrealistic, writes ex-Shell geoscientist Jilles van den Beukel.  He argues that it should be seen in the light of Mohammed bin Salman’s grab for power. The deputy crown prince, the King's favourite and de facto ruler of the country, has a limited time span to solidify his power base, given the frail health of his father. Van den Beukel argues that only … [Read more...]