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
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