Oil industry investment is recovering. Even so, Saudi Aramco’s chief executive is still warning there is a looming supply crunch down the road on current trends.
The oil consultancy Wood Mackenzie yesterday reported that the number of conventional oil developments (that is, other than US shale oil) to be greenlighted, is on track to double this year after more than halving in the 2014 to 2016 period, during which oil prices fell by about 60 per cent.
“The upstream industry is continuing on the road to recovery,” says Angus Rodger, an upstream analyst at Woodmac and the report’s author. This year “marks a turning point,” he added, with final investment decisions (FIDs) expected on about 25 major conventional oil developments, compared with 12 last year.
But on Monday, Amin Nasser, the chief executive of Saudi Aramco restated his warning about under-investment.
“About US$1 trillion in investments has been lost in the current downturn, concurrent [with] growing oil demand and the natural decline of developed fields,” Mr Nasser said in a speech in Istanbul. “Conservative estimates suggest we need about 20 million [additional] barrels per day over the next five years to counter these effects,” and current investment won’t be enough to meet it.
So, is the oil industry going to be able to meet rising demand or is it heading toward another crunch?
Mr Nasser, in fact, was citing last year's Woodmac report estimating that $1tn of planned oil projects had been canceled, postponed or otherwise shelved through 2020. Woodmac analyst Malcolm Dickson says he sticks by that assessment.
Mr Rodger notes that the investment getting the go-ahead this year tends the relatively low risk variety.
Typical was Liza Phase 1, a development off the coast of Guyana that was given the final go-ahead last month by operator ExxonMobil. The field, which lies in more than 1,500 metres of water, 190 kilometres northeast of the the South American country’s Atlantic coastline, will cost about $4.4 billion for its partners, which apart from Exxon’s 45 per cent operator’s interest, includes Hess, with 30 per cent, and a Cnooc Nexen joint venture, with 25 per cent, and is an addition to a much larger development.
Eleven of the 15 FIDs taken so far this year have been for brownfield developments, building off existing infrastructure and extending older projects. “Not only are these projects less risky than greenfield developments, they also tend to be less capital-intensive and are quicker to bring onstream, offering a quicker payback and better returns on development dollars," Mr Rodger says.
The big private-sector international oil companies have cut costs substantially to preserve cash and they can be selective about which of their large cache of projects they can finance. “We are beginning to see them leverage their financial strength to push forward the very best projects in that extensive pipeline,” Mr Rodger says. But elsewhere, he adds, “we are seeing small to mid-caps in the international sphere and the [national oil companies] in particular, especially in Asia, continue to stay cautious and pull back from major new project investments.”
So, what is the bottom line?
“We don't see a shortage of oil or gas supply in the near term, as there are abundant low cost sources of supply available around the globe,” says Mr Rodger.
That picture might change further down the road.
What you as a drone operator need to know
A permit and licence is required to fly a drone legally in Dubai.
Sanad Academy is the United Arab Emirate’s first RPA (Remotely Piloted Aircraft) training and certification specialists endorsed by the Dubai Civil Aviation authority.
It is responsible to train, test and certify drone operators and drones in UAE with DCAA Endorsement.
“We are teaching people how to fly in accordance with the laws of the UAE,” said Ahmad Al Hamadi, a trainer at Sanad.
“We can show how the aircraft work and how they are operated. They are relatively easy to use, but they need responsible pilots.
“Pilots have to be mature. They are given a map of where they can and can’t fly in the UAE and we make these points clear in the lectures we give.
“You cannot fly a drone without registration under any circumstances.”
Larger drones are harder to fly, and have a different response to location control. There are no brakes in the air, so the larger drones have more power.
The Sanad Academy has a designated area to fly off the Al Ain Road near Skydive Dubai to show pilots how to fly responsibly.
“As UAS technology becomes mainstream, it is important to build wider awareness on how to integrate it into commerce and our personal lives,” said Major General Abdulla Khalifa Al Marri, Commander-in-Chief, Dubai Police.
“Operators must undergo proper training and certification to ensure safety and compliance.
“Dubai’s airspace will undoubtedly experience increased traffic as UAS innovations become commonplace, the Forum allows commercial users to learn of best practice applications to implement UAS safely and legally, while benefitting a whole range of industries.”
How Voiss turns words to speech
The device has a screen reader or software that monitors what happens on the screen
The screen reader sends the text to the speech synthesiser
This converts to audio whatever it receives from screen reader, so the person can hear what is happening on the screen
A VOISS computer costs between $200 and $250 depending on memory card capacity that ranges from 32GB to 128GB
The speech synthesisers VOISS develops are free
Subsequent computer versions will include improvements such as wireless keyboards
Arabic voice in affordable talking computer to be added next year to English, Portuguese, and Spanish synthesiser
Partnerships planned during Expo 2020 Dubai to add more languages
At least 2.2 billion people globally have a vision impairment or blindness
More than 90 per cent live in developing countries
The Long-term aim of VOISS to reach the technology to people in poor countries with workshops that teach them to build their own device
Central Bank's push for a robust financial infrastructure
- CBDC real-value pilot held with three partner institutions
- Preparing buy now, pay later regulations
- Preparing for the 2023 launch of the domestic card initiative
- Phase one of the Financial Infrastructure Transformation (FiT) completed
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