Cont'd from Week in Focus

摘要

Saudi Arabia says shale oil is no threat. According to Ibrahim al-Muhanna, adviser to the country's Oil Minister, shale oil production poses no great risk to OPEC's global oil and gas market share, despite persistent member country fears. Said al-Muhanna, "Increases in the production of shale oil during the remaining part of this decade will be restricted to the US and Canada within the limits of 1.5MM b/d, which is a small quantity in a market where demand exceeds 90MM b/d. Production of shale oil in the remaining parts of the world is not expected before the start of the next decade at best." Further, al-Muhanna suggested that the cost of producing shale oil—approximately $70-80/bbl—will significandy reduce its ability to compete with OPEC output. OPEC concerns about the shifting global production have been on the rise, with US crude production exceeding 7MM b/d in 4Q 2012 as Saudi Arabian output dropped 5% month-on-month to 9.025MM bbl in Dec; US production is also expected to see a 570K b/d boost in 2013, while demand for Saudi Arabian product is expected to drop by 400K b/d.