The largest NK ignored the spurt in the cost of oil above $50 a barrel

The largest NK ignored the spurt in the cost of oil above $50 a barrel

Moscow. May 30. The world’s major oil companies are not going to hurry with the increase in investment and output after raising the cost of oil to $50 per barrel, writes the Wall Street Journal.

“We will not rush to increase activity”, even with the rise of oil prices to $ 60 a barrel, said chief financial officer Brian BP Gilvary.

British-Dutch Shell last week announced new job cuts, starting in 2016, the reduction in the company amounted to not less than five thousand jobs. Shell plans to reduce spending on new projects in 2016 by about ten percent.

American Exxon Mobil has reduced the amount planned for this year investment is 25%, and decreased the number of active rigs, reaching 60 units in the boom period in the market, up to 16 units.

The rise in the price of oil to $50 a barrel can support small companies, for example, the American shale oil producers, making their projects profitable. However, costly and long-term projects, which spetsializiruyutsya major oil company may not be profitable at this price level, experts say.

However, Chevron Corp., most projects which require higher prices to be profitable, recently announced that its operations in the shale oil field Permian Basin will be profitable at an oil price of $50 per barrel. The company has reduced the cost of production at the field by 40%, and acting on this plot four thousand wells will provide her a 10% return when the price of WTI at $50 per barrel, the company said.

Most American oil producers say that the price of $50 per barrel will not be an incentive for them to drill new wells. Experts, however, wonder about whether they will push this to the commissioning of the previously drilled wells.

Analysts at wall street basically think the price of oil at $60 per barrel will encourage producers to increase production, said the head of oil markets research at Morgan Stanley’s Evan Calio.

However, according to the expert, this position may prove to be incorrect. Despite the fact that some producers of shale oil is likely to begin production from previously drilled wells if the oil price will stay above $50 per barrel, most companies will require months of stable prices before they will be able to raise enough funds to once again increase production, says Calio.

“To increase production the companies will take longer than expected,” – said the expert.

In his opinion, a signal to increase production in the United States is the rise in oil prices to $80 per barrel.