Analysts thought that a way could be found to allow for the Iranian increases, but Saudi Arabia’s deputy crown prince, Mohammed bin Salman, who has become the crucial power broker in the country, appears to have reduced the room to maneuver with statements making Saudi participation contingent on full compliance.
What puzzles analysts is how Saudi Arabia and other countries could have scheduled this meeting if they knew it was doomed to failure. After all, the idea was to calm the markets, not roil them.
.. The Saudis, analysts say, increasingly seem to accept that oil prices are no longer something they can control. Prince Mohammed, who has authority over the Saudi oil industry, warned that the kingdom could increase production by a million barrels per day in the coming months if it chose.
.. With low production costs, estimated at $3.50 to $5 per barrel, Saudi Arabia can compete on price with any producer. So can Russia, which can produce oil for about $4 per barrel, according to IHS.
.. For instance, he has said he plans a public listing of the national oil company, Saudi Aramco, the world’s largest oil-producing company. A public listing might require the company to pay more attention to the requirements of outside investors than to other OPEC members.
.. Russia has plenty of reason to go along with a freeze. Russia’s economy, which depends heavily on oil revenues, is in recession. The Kremlin’s desperation for higher prices is palpable, with the country committed to two wars, in Ukraine and Syria. At home, wages are being cut, bringing early signs of social unrest ahead of a parliamentary election in September.
.. Since the Soviet period, OPEC has looked on Russia as a freeloader on price-boosting production cuts: Russia benefited but never joined in, citing technical problems of closing wells bored into permafrost and high capital outlays for pipelines in Eurasia. But Russia may not have to make any sacrifice to go along with a freeze. Oil production is at a post-Soviet high and is not expected to go much higher in the short term.
Trump’s Updated ISIS Plan: “Bomb The Shit Out Of Them,” Send In Exxon To Rebuild
People are thinking like I don’t have a plan, I hate doing it. So I was on one of the shows, and I said:
ISIS is making a tremendous amount of money because of the oil that they took away, they have some in Syria, they have some in Iraq, I would bomb the shit out of them.
I would just bomb those suckers, and that’s right, I’d blow up the pipes, I’d blow up the refineries, I’d blow up ever single inch, there would be nothing left.
And you know what, you’ll get Exxon to come in there, and in two months, you ever see these guys? How good they are, the great oil companies, they’ll rebuild it brand new… And I’ll take the oil.
Stung by Low Oil Prices, Companies Face a Reckoning on Debts
If prices hold at such low levels — oil traded near $28 on Tuesday — as many as 150 oil and gas companies could file for bankruptcy, according to IHS, an energy research firm.
.. As much as a third of the oil industry could be consolidated as a result of the downturn, according to one estimate.
.. “The industry will be permanently damaged,” said Steven H. Pruett, chief executive of Elevation Resources, a leading Midland oil company.
.. energy companies on average have twice as much leverage, or borrowed money, as companies in the Standard & Poor’s 500-stock index
.. Major oil companies like Exxon Mobil andRoyal Dutch Shell, which have ample cash cushions, may end up benefiting from the turmoil, scooping up broken companies or their assets.
.. Nationally, just 15 percent of oil and gas production is hedged in 2016, compared with 28 percent of production in the fourth quarter, according to IHS, the research firm.
.. As rigs go off-line, companies are using technologies to squeeze as much oil as they can out of existing wells. But if an aging well breaks, many companies are not spending the money to fix it, and executives predict a rapid decline in production as shale wells peter out.
.. We’re hoping to see prices stabilize and recover sometime in 2017,” Mr. Lucas said.
One of Africa’s Biggest Dams Is Falling Apart
Mosul Dam, the largest such structure in Iraq, urgently requires maintenance to prevent its collapse, a disaster that could drown as many as five hundred thousand people downstream and leave a million homeless. Four days earlier, the energy minister of Zambia declared that Kariba Dam, which straddles the border between his country and Zimbabwe, holding back the world’s largest reservoir, was in “dire” condition.
.. In 2014, researchers at Oxford University reviewed the financial performance of two hundred and forty-five dams and concluded that the “construction costs of large dams are too high to yield a positive return.” Other forms of energy generation—wind, solar, and miniature hydropower units that can be installed inside irrigation canals—are becoming competitive, and they cause far less social and environmental damage. And dams are particularly ill-suited to climate change, which simultaneously requires that they be larger (to accommodate the anticipated floods) and smaller (to be cost-effective during the anticipated droughts).
.. But the main issue is that, like many such dams, the project shouldn’t exist in the first place. Opened in 1986, it was built on unstable gypsum bedrock, requiring grout to be constantly injected into the foundation to prevent the dam’s collapse. That work has ceased. In 2006, long before ISIS began making headlines, the U.S. Army Corps of Engineers called Mosul Dam “the most dangerous dam in the world.”
.. At least three million people live in the flood’s path; most would die or lose their crops or possessions. About forty per cent of the electricity-generating capacity of twelve southern African nations would be eliminated.
.. But maintaining a dam is expensive—and much less popular than building one.