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Oil industry experts don’t expect the price of crude oil to breach the $55 a barrel threshold, according to Oil India (OIL) Chairman Utpal Bora.
Speaking to BusinessLine , Bora said, “In a recent presentation, even top energy analysts such as Daniel Yergin of IHS did not see crude oil going beyond $55/bbl.”
Bora assesses the upward movement of crude price as being positive for upstream oil companies.
He said, “Brent has just crossed $50/bbl. This is good news for the upstream companies like Oil India and ONGC because our margins will be better. The cost of production is also lower due to our aged oil fields; we are comfortable in the $50-$55 range.”
Increasing output OIL is also evaluating a strategy for increasing production from its ageing fields in the North-East through tie ups with Schlumberger. Commenting on the roadmap, he said, “The plan is that they will take over the field and we will come to an agreement that aims to double the production in three years. Any incremental oil will be shared on a dollar per barrel basis. The Jorajan field is an old field and by doing something with Schlumberger, we will increase production there.”
The country’s largest crude oil producer, ONGC has recently signed a statement of understanding with Schlumberger for enhancing production at its Geleki field in Assam. OIL will be looking to forge a similar production enhancement contract with Schlumberger, according to Bora.
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