The oil market turmoil is expected to last “three to five years” due to underinvestment and the COVID-19 pandemic, the head of American hydrocarbon giant ExxonMobil told a forum organized in Qatar on Tuesday.
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“We probably have three to five years of turmoil in the oil markets ahead of us. How this manifests itself at price levels will largely depend on demand, which is difficult to predict,” said Darren Woods at the Qatar Economic Forum.
In addition to the underinvestment in the search for new deposits, the pandemic “deprived the industry of a lot of revenue,” he estimated.
“We’re going to see a lot of volatility and disruption in the market unless we adopt more thoughtful policies,” he predicted.
Qatar’s Energy Minister Saad Al-Kaabi, meanwhile, has criticized the “demonization” of the oil companies and the taxes levied in some countries.
“I didn’t see governments stepping in when[oil companies]were losing money and borrowing when the Texas oil price was negative,” he said.
Meanwhile, Sheikh Nawaf Saud Al-Sabah, Vice President of Kuwait Petroleum Corporation, announced that Kuwait is beginning its first offshore oil exploration. “The first drill arrived a week ago and will be commissioned soon,” he said.
The Gulf country is also building “the world’s largest refinery, with a capacity of 615,000 barrels per day,” which is scheduled to come online in late 2022, Al-Sabah said.
In his opinion, this project will help meet the increased demand from Europeans trying to wean themselves off Russian hydrocarbons since the invasion of Ukraine, but also from the rest of the world, he added.
At the gas field, the ExxonMobil chief also traveled to Doha to sign an agreement making the company the fourth foreign partner in the North Field East (NFE) project, the expansion of the world’s largest natural gas field.
ExxonMobil has acquired a 6.25% stake in a joint venture with Qatar Energy, a stake equal to that of France’s TotalEnergies. The Italian ENI and the American ConocoPhillips each acquired 3.125%.
For the head of ExxonMobil, this project can “rebalance” the world market for gas, which is also affected by the war in Ukraine.