Referring to the impacts left by the economic meltdown on the global oil market, Deputy Head of the National Iranian Oil Company (NIOC) for Investment Hojatolah Ghanimifard told FNA conventional oil and gas producers seem to be experiencing "a better condition in comparison with the years when crude prices were above $80 or 100".
"Given the slash in oil prices, oil extraction and investment is costlier for unconventional producers and as a result the finished cost for the production of each barrel of oil is higher than what is paid by conventional producers, making extraction uneconomic for the first group of countries," Ghanimifard said.
"Thus, many of these unconventional producers have stopped their costly projects for oil exploration and production," he added.
If predictions that the global economic crisis will end by the end of the current year come true, then we will witness both a move towards economic growth and flow of investment in the oil industries, Ghanimifard said.
Elaborating on the causes underlying a future shock in the global oil market after the end of economic crisis, Ghanimifard reiterated that with the beginning of the global economic growth, demands for crude oil would multiply after one or two years but as there is no investment in oil producer countries at present, the world will witness a shock in the oil market due to a severe lack of supply.
The global economic crisis and the subsequent slash in investment in the upstream oil and gas projects will be followed by a leap in oil prices once the world economy retains growth, a senior Iranian oil official said .
News ID 8145
