Makers vs Takers

“We are a price taker. We are not a price maker, unfortunately. So, as we have just re-discovered, if you are not a price maker but a price taker, your job is to control breakeven,” Total chief executive Patrick Pouyanne told the World Petroleum Congress (WPC) this week.

He was referring to the past three years when oil and gas companies (aka price takers) have had no other choice but to introduce very strict financial discipline, boost the efficiency of their operations, defer or cancel quite a few development projects and in general learn again how to survive and thrive in a lower oil price environment.

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Shortages in the era of abundance

“Global energy demand remains strong and growing, but abundant supplies of oil and gas are now a fact of life. As a result, the economics of the past are changing,” says BP chief executive Bob Dudley.

Indeed, the once-popular idea of the world running out of oil in the future has been replaced by discussions about when exactly oil demand is likely to start declining. BP chairman Carl-Henric Svanberg suggests oil consumption could peak within the next 20 years, as a result of the world using more renewable energy and thanks to technological advances and efficiency in all fields of life, from engines to electric vehicles.

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Many a true word…

“I want to be the second to answer that,” Total chief executive Patrick Pouyanne joked with a big smile.

The smile was in response to a question addressed to him and to state-owned Saudi Aramco chief executive Amin Nasser on whether Total would like to buy a stake in Aramco, and whether Aramco wants to see Total as a shareholder.

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