Christophe de Margerie, CEO of French oil company Total thinks we’re near our peak oil production. He doesn’t see the world pumping out more than 89 million barrels of oil daily.
Currently the world demands 84 million. Once we get out of this economic funk, the demand will pick up once again and as the IEA predicted earlier today, we’ll get a serious supply problem and the price of oil will shoot straight back up.
Rather than explore options beyond petroleum, de Margerie thinks oil companies just need to try harder, and they shouldn’t let their falling revenues cut down capital spending. Drill baby drill now, or be thirsty later, says the oil man:
Meanwhile, Mr de Margerie now expects a faster decline in production at older fields, such as those in the North Sea. At lower price levels, companies will find it harder to justify the greater cost of keeping such fields pumping.
Total’s chief executive has long been an outspoken advocate of maintaining investment, rather than repeating the mistakes of previous cycles by cutting costs so much that the industry is unable to meet global demand when economies recover. But he is also in the midst of trying to renegotiate contracts in Canada and is considering further investments in Venezuela.
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