[Peakoil-announce] AFR Mon 19 June "There's oil galore, says BP's global head"

[Christal George]

   FYI




   There's oil galore, says BP's global head<
   Jun 19

    Ian Howarth



   The world is not running out of oil and high prices for crude oil
   should soon start to fall back towards $US40 a barrel or lower,
   according t

   Speaking in London at the weekend, Lord Browne dismissed views that
   petroleum supplies were running out fast, contradicting the "peak oil"
   lobby that believe   decline.

   "It is very likely that, in the medium term, prices will stand   about $US40 on average," he said. "In the very long run, even $US   to $US30 prices are possible."


   But Lord Browne said it was unlikely oil prices would fall quickly,
   despite large oilfields still being found regularly.


   Large finds have been particularly common in places such as West Af   rica and Canada, where vast oil sands can be exploited profitably.<   /p>


   Launching BP's annual petroleum industry survey, Lord Browne warned
   that unfounded fears of crude-oil shortages were driving up prices.


   The BP statistical survey found world energy growth slowed in 2005.   An increase of 2.7per cent was down from a 4.4per cent increase in
   2004, which

   The survey also noted that energy consumption in the United States
   fell 0.1per cent last year,    had experienced a combination of higher than normal economic growth
   and a decline in energy consumption.


   BP's survey found that China reduced its energy consumption growth
   from 15.5per cent in 2004 to 9.5per c   growth in China was all but unchanged a

   BP's study found that in 2005, world oil consumption weakened while
   production rose. This created an excess of supply and an increase in
   inventories, despite public opinion that crude oil was in short
   supply.


   The statistics appear to counter claims that the world is running o   ut of oil, or reaching the stage where supply cannot match demand,
   known as "peak oil".


   "Prices rose further with Brent crude averaging $US54 a barrel   2005 as a whole - a development considered to be due less to
   fundamentals t   spare capacity," the

   It said growth in oil consumption fell by 1.8million barrels a day    to 1million barrels a day, mainly because of the slowdowns in the US
   and China

   The survey said slackening growth also resulted from weakness in th   developing Asia-Pacific region, where price subsidies were reduced in
   Indonesia, Malaysia, Thailand and the Philippines, and because India
   substituted imported oil with imported gas and coal.


   The survey revealed global oil production in 2005 grew by 889,000
   barrels a day, equivalent to 1per cent, with the Organisation of the
   Petrol

   This was lower than expected for a number of reasons: OPEC producer   reaching or being close to full capacity; security problems in Iraq;
   hurricanes in the US; dec   North Sea; a slowdown in Russian production;   and disruptions to production; and rising cost inflatio

   This reflected constraints in the contracting and engineering secto   rs, that led to production delays.


   World gas consumption growth also fell back in 2005, the BP survey
   found, although the fall of 2.3per cent was less than that for oil.


   BP's researchers found internationalisation of gas continued via
   pipelines and the use of liquefied natural gas.


   Domestic supply availability increased in some specific markets and
   industrial gas consumption in particular proved to be price sensitive
   in liberalised energy markets.


   Australian oil and gas producers' earnings and share prices have ri   sen sharply in recent years in line with higher selling prices for oil
   and a subsequent increase in exploration.


   Companies including BHP Billiton, Woodside Petroleum and Oil Search
   have been among the beneficiaries.


   Meanwhile, high energy prices have been a challenge for many other
   companies.


   Energy retailers and generators such as Origin Energy and AGL have
   expanded further into exploration to offset the higher input costs
   from fue

   Major oil users, such as Qantas Airways, have suffered reduced prof   it growth as a result of the increased costs.


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