UAE’s Mubadala Petroleum is looking at deploying capital in projects which are resilient to lower oil prices, according to the company’s chief executive officer Maurizio La Noce.
“We are looking at projects which could be resilient if the prices go down to $70 or even $60. Manora (oil field) in Thailand is a great example. This is a great project even at lower prices. It is phenomenally efficient,” La Noce told Gulf News on the sidelines of last week’s Abu Dhabi International Petroleum and Exhibition.
Mubadala Petroleum is an exploration and production companany with offices in the UAE, Oman, Bahrain, Libya and East Asia.
The announcement came as the OPEC basket plunged into a new four-year low last Tuesday – just under $80 per barrel- instilling a renewed sense of instability in the market.
“There are so many factors that contribute to the direction of oil prices. There are economic reasons as well as political reasons. One of the simplest things to explain is exchange rates. When the dollar goes strong, oil prices go down as oil prices are pegged to the dollar,” La Noce said.
He also added that there could be other reasons like the disappointing performance of economies in Southeast Asia, China and India.
“On the other side, the US economy is booming and at the same time Europe is a little bit in a depressing mode.”
“There is supply and demand. Demand is not rising and supply is strongly driven by the unconventional production in the United States. In this scenario, what Opec (Organisation of the Petroleum Exporting Countries) is going to do will be important.”
“In the past Opec used to cut and oil prices went up. Now if they cut (the price), they will lose the market share.”
Opec countries are due to meet in Vienna on the 24th of November to make a decision whether to cut oil production or not. Kuwait and Saudi Arabia have said they will not reduce their output to increase the price.
Mubadala Petroleum said it started production from its Manora oil field in the northern Gulf of Thailand on 11th of November.
Production is expected to reach a peak rate of approximately 15,000 bopd with plans for up to ten production wells and five injection wells in the main reservoir sequence.
