Matt Simmons "Scathing" On Great White Hope Projects - Oil Majors "Basically In Liquidation"

[hatrack]

In a private meeting with Matt Simmons, president of the energy bank, Simmons & Co International, Energy has been told that the petroleum game is up. And even if it proves possible to raise global oil output further, it will be for only a short time. Simmons said he regretted not making his predictions for the future of Big Oil much more dire than had been portrayed in his controversial book, Twilight in the Desert, published two years ago. "If I was redoing Twilight in the Desert today, I'd sharpen the severity of the warning quite significantly.

"May, 2005, still stands out as the all-time record high for global crude production … 74.3million barrels per day, and now we're down 1.2 million barrels per day. The IEA shrug that off, saying that if you look back over the last few years, records have been set several times; a peak followed by a falling off, then another peak, and so forth. That's an interesting thesis. But as we watch Mexico start into its big-time decline and UK and Norway continue their rapid declines, plus Indonesia, Egypt, Argentina and others besides: you can see several years of relentless decline. Add them up and say, find me one area coming on in the next few years that will halt such a collective decline: it's just not there. Major oil companies have quadrupled their spending over the past five years and, other than acquisitions, basically they're in liquidation."

Simmons reiterated his tough stance on drilling, which is the key to unlocking new resources. Given the criticality of a sustained offshore effort in that regard, he said the level of understanding of the current rig crisis and the need for renewal, let alone growing the global fleet was woeful.

"We had our two-day conference at Gleneagles at Offshore Europe time and what impressed institutional investors the most was just how tight order books are for offshore rigs and how long that order book is going to stay intact. I had a long talk with one of the senior guys from National Oilwell. He said, 'I don't think your audience quite understood what I was talking about'.

EDIT

http://www.thisisnorthscotland.co.uk/displayNode.jsp?nodeId=149212&command=displayContent&sourceNode=150624&contentPK=18878051&folderPk=85744&pNodeId=150607