ESL Lesson 1
Oil in Our Every Day Life
ESL Lesson 2
The History of Mining
ESL Lesson 3
Economic growth
ESL Lesson 4
Delivery Systems
ESL Lesson 5
Cities and Population Movement
ESL Lesson 6
Recycling
ESL Lesson 7
Rubber
ESL Lesson 8
Farming
OPEC Warns High Commodity Prices May Kill Oil Projects
by Selina Williams and Sally Jones, Dow Jones Newswires, Paris, Friday, April 7, 2006
http://etf.seekingalpha.com/article/9061
Soaring (rising quickly and going high) commodity and raw material prices are increasing the cost of oil and gas projects (venture) by up to three times, Organization of Petroleum Exporting Countries (OPEC) ministers said Friday. Although current high oil prices may be helping to drive (push) much-needed crude investment, the rising cost of construction projects could curtail (slow down or stop) new energy production development, they warn. Qatari Oil Minister Abdullah Ai Attiyah said: "Our costs have tripled from two years ago, due to high commodity prices. And it's not just that, it is also contractors (builders/construction companies) who have tripled their prices."
Alongside high oil prices, the cost of raw materials and commodities has also risen rapidly (quickly) in recent months. The price of copper - a key material in the development of energy projects - has so far this year risen by 30% compared with a year ago. Friday, three-month copper on the London Metal Exchange hit an all-time record high price of $5,830 a metric ton.
AI Attiyah, told delegates that he has spoken to senior executives (managers of companies) at international contracting firms (construction companies) to warn them of the damage which may be caused by rising development costs. "I have told the CEO's that projects have to be viable (usable) on both sides otherwise it will kill the projects.” AI Attiyah's comments were also echoed (said the same thing), by United Arab Emirates Oil Minister Mohammed AI Hamli. Hamli said as a result of soaring commodity costs, it is difficult to forecast how much it will cost the U.A.E. to raise its crude production to 3.5 million barrels a day from 2.5 million b/d by 2010.
A shortage (lack) of commodities also means that machinery such as cranes are in short supply (limited supply), will enables (allows) construction firms to charge extortionate costs (higher than normal prices) for projects, said an executive from a Gulf-based oil producing country. Officials of the Organization of Petroleum Exporting Countries have acknowledged (understood) there isn't much they can do right now to boost supply (increase supply). Led by the Saudis, OPEC is pumping close to flat out (pumping as fast as they can). "OPEC looks in pretty bad shape now," Mr. Halff says. "At some point in time we're going to reach a limit, and we will see a real impact (effect) of increased oil prices on our economic activity."
Other analysts have talked of the possibility of crude rising to $100 a barrel or more, but most aren't predicting such high levels for this year unless there is a major loss of supply due to a cataclysmic (disastrous) event. One scenario: Amid Tehran's standoff with the West over Iran's nuclear-energy program, there might be a cutoff of Iranian oil exports (4 million barrels per day) or a closure of the Straits of Hormuz, a choke point for oil shipments from the all-important Persian Gulf. At that point the minimum price per barrel would be $160-200.
Continue to: Carbon black shortages slow down mining
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Oil in Our Every Day Life
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Glossary of Oil & Gas Terms
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World Crude Oil Production Forecast
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More Oil Fields will be Found
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Some Producing Oil Fields by size
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Expected Oil fields by year 2006-2010
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Future from 2010
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World Oil Consumption 2006
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OPEC Warning
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Carbon black shortages slow down mining
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