By Moses Aremu
Oil prices will rally back up, says Austin Avuru, Chief Executive of Seplat, the London listed Nigerian independent. “But when? I do not know”.
Avuru was evaluating the Energy Outlook To 2040 released by ExxonMobil last week and responding to questions about the slowing of the Chinese economic growth in the context of a crash in the U.S. demand for light, low sulphur (sweet) crude grades from Africa(including Nigeria).
“Geographies are shifting”, he notes, “but the energy mix as well as the demand supply equilibrium have not changed much”.
“The (ExxonMobil Energy) Outlook suggests that there would have been a supply deficit and prices might have gone far above $100 if Shale gas and oil have not come along”, Avuru argues. “Thanks to technology and pricing (producing unconventional oil and gas), there is still enough oil and gas to satisfy the growing demand through 2040. Wind and renewables have failed to be the solution”.
Asked about the part of the report that indicates Supply- demand balance tilts from -5MBDOE in 2010 to +8MBDOE in 2014 (meaning from a supply deficit to a supply surplus) for oil, Avuru, himself a petroleum geologist with 34 years industry experience declares that this figure is a data point for a short period in broad run of years: “As I am sitting here, as far as that analysis goes, I don’t see a glut in the market that will lead to a $60 price, nor a demand surge that will take us above $100”.