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Oil Price Slump

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By John Donovan

I have already highlighted the recent wishful prediction by Shell CEO Ben van Beurden that oil will return to “very robust” pricing in the long-term.

We have all witnessed the subsequent slump in oil prices.

Some extracts from a current Bloomberg article:

The global crash in crude prices is reverberating through the oil and gas industry, pressuring producers to curtail investment to protect profits and avoid cuts to dividend payments.

Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA are already paring back as new investment fails to yield positive returns.

The largest oil companies are also pulling back from U.S. shale projects to avoid the investment necessary to keep production buoyant. Shell, for example, sold acreage in August in the Haynesville and Pinedale shale areas.

An illustration of the challenges oil companies have faced in recent years in bringing large discoveries to market is the $48 billion Kashagan venture. Partners in the Caspian Sea project include Exxon, Shell, Total and Eni SpA. Long-delayed and over-budget, it entered production only briefly last year before being shut down due to leaks. It’s now undergoing expensive repairs and may not start back up again before 2016.

Brent crude fell to the lowest level in almost four years on concern global supply is outpacing demand yesterday.

FULL ARTICLE: Oil Slump Means Canceled Projects as Investment Declines

 

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