Daily GPI / NGI All News Access

Anadarko Sees Major Oil Recovery on Horizon

Anadarko Sees Major Oil Recovery on Horizon

Anadarko CEO Robert J. Allison Jr. is not alone in predicting a sustained oil market recovery now that OPEC has decided it can live with a little less supply on the market. But unlike most of the soothsayers attending the Howard Weil Energy Conference in New Orleans, Allison sees a major turnaround ahead and much greater volatility than has been present in market cycles of the past.

His reason: fixed supply at a time of steadily rising demand. "Who's going to add new supply?" he asked. "Not BP Amoco-Arco-blank. They're too busy managing merger consolidation. They have bigger fish and chips to fry." And it won't be the small operators who are struggling just to stay in business right now, he said. With oil demand growing 2 to 2.5% per year worldwide and production in decline, a major price surge is in store. Allison predicts oil prices will shoot well above $18/bbl in a much "longer and stronger" market recovery than at the end of previous cycles. He also sees much greater volatility in the oil market than has been present in the past.

"We're pleased that BP has worked its way through the A's and passed by us," he said. It leaves Anadarko to take advantage of the new opportunities created by the depressed market, in particular, the lease opportunities available in the sub-salt play in the Gulf of Mexico. Look for Anadarko to be aggressively attempting to enhance its already strong position in the Gulf this year. "It's great to stay ahead of the competition. No one else is doing sub-salt like we are right now," and Anadarko would like to keep it that way.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus