Dr. Yousef Alshammari, CEO and head of Oil Research at CMarkits based in Saudi Arabia, joined Hart Energy’s Jessica Morales and Faiza Rizvi to explain the impact the oil industry’s downturn has had on crude-dependent economies of the Middle East.
In particular, Alshammari, who has worked as a research fellow at OPEC and as a media commentator on global energy issues at the OPEC ministerial meetings, shared his thoughts on why Saudi Arabia recently voluntarily agreed to cut an additional 1 MMbbl/d in June.
“Demand in June is expected to be less than global supply,” he said. “I believe this issue has triggered the attention of OPEC and that is why they have taken those extra measures in order to avoid rising inventory in order to accelerate the supply and demand balance, reduce inventories faster and also not to delay the issue of supply and demand back into perhaps 2021.”
As oil prices collapse and U.S. shale companies shut-in production, service companies like Baker Hughes Co., Halliburton Co. and Schlumberger Ltd. have expressed interest in expanding operations in the Middle East in the second quarter of 2020. Alshammari noted that companies like Halliburton and Schlumberger have already been in the Middle East for many years.
“I think they are an important part of the oil industry in the Middle East, especially in Saudi Arabia,” he said. “They have huge operations going on in terms of cementing, drilling, well constructions. There is a wide range of service that these companies are doing for the oil industry.”
Energy firms reopened more offshore crude oil production by Sept. 18 in the U.S.-regulated northern Gulf of Mexico as shut output fell to 21%, or 396,554 barrels per day (bbl/d), the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said.
The oil and gas rig count rose by one to 255 in the week to Sep. 18, energy services firm Baker Hughes Co said in its weekly report.
XTO Energy’s results from a Wolfcamp Shale completion in Loving, Texas, plus an oil and gas discovery announced by BP in the Gulf of Mexico top this week’s drilling activity highlights from around the world.