Daniel Yergin, the chairman of Cambridge Energy Research Associates and author of The Prize, a history of the oil industry, argues that this is one of the toughest times for oil companies since the wave of nationalisations in the 1970s.
“The irony is that the other challenging times were when the oil price was low,” he says. “Now it is because oil has gone to $100 [a barrel].”
...Yet Jeroen van der Veer, Shell’s chief executive, mounted a vigorous defence of the oil majors’ business model on Thursday, arguing that in the future, conditions will favour the big western companies.
The industry’s production figures have been disappointing in part because of the high oil price in countries where companies operate under production-sharing contracts. As the price rises, the contracts generally give the country a greater share of any oil produced.
This has exacerbated the fundamental problem: that the oil and gas resources in the international companies’ traditional bases in the US and Europe are running out, while getting access to the still-abundant resources of the Middle East, Africa, and South America has become more difficult.
Financial Times
