Oil executives see much more room for cost reductions, increased efficiency and deeper collaboration in the lower oil price environment. But they also stress the importance of sticking with these practices, even if under-investment in future production starts to pressure supply and push crude values higher. The industry needs a culture in which companies are always targeting efficiency improvements, no matter where oil prices are, Norwegian state-controlled oil and natural gas producer Statoil’s chief executive, Eldar Saetre, says. The firm has cut capital expenditure (capex) forecasts for the first phase of its 1.9bn-3bn bl of oil equivalent Johan Sverdrup project, in the North Sea, by a fifth compared with its development and operation plan, to 99bn kroner ($12bn). The first stage now breaks even at oil prices below $25/bl. “I am almost surprised to say it myself,” Saetre says.
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