>Energy Roundtable in San Francisco

December 3, 2009

>with our chair Steve Percy former CEO of BP America and Peter Robertson former Vice Chair of Chevron we discussed the stat of oil and natural gas. Refining business is vey bleak as CAFE, margin pressure and ethanol growth has taken out any industry growth.Globally gas trades differently than the self sufficient USA and both experts just dont see natural gas prices changing much. Majors will see reserves drop by 30 million barrels by 2030 so even if demand stays flat the industry has to find 3x Saudi production to make up the shortfall. Much of the new deep well and other new finds are in the $60-$70 production cost category and other 3rd world production has other costs. For example security numbers 20,000 for Chevron in Indonesia to protect their workers. They need four security people there for every worker. Although OECD demand down 2 milllion barrels this year the increased demand of 1.6 million barrels in developing countries will continue to put pressure on oil prices. Carbon plans can change everything but in general oil prices in $70-80 range looks to be very applicable and stable to support current demand.

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