The United States has surpassed Saudi Arabia as the world`s biggest oil producer in 2014. The oil shale revolution has started to change the economy as the U.S produced 90% of the energy it consumed last year.
India has recorded the highest growth in energy consumption among major economies.
BP said the U.S shale revolution helped it overtake Saudi Arabia as the world`s biggest oil producer and surpass Russia as the world`s largest producer of oil and gas.
On the other hand, Chinese growth in consumption slowed to its lowest level since 1998 as the economy rebalance away from energy intensive sectors, though China remained the world`s largest growth market for energy.
The United States produced 15,9 percent more oil in 2014 at 11,6 million barrels of oil per day to topple Saudi Arabia`s 11,5 million bpd production, according to BP Plc`s Statistical Review of World Energy released today.
Russia was placed third with 10,8 million bpd oil production.
The United States surpassed Russia as the world`s largest producer of oil and gas, and they produced 1,250,4 million tons of oil and oil equivalent natural gas last year. This compared with Russia`s 1,062 million tons of oil equivalent. According to BP, world primary energy consumption slowed markedly, with growth of just 0,9 percent last year, a lower rate than at any time since the late 1990`s.
BP Group Chief Executive Bob Dudley said: “The eerie calm that had characterised energy markets in the few years prior to 2014 came to an abrupt end last year. However, we should not be surprised or alarmed.”
“These events may well come to be viewed as symptomatic of a broader shifting of the tectonic plates that make up the energy landscape, with significant developments in both the supply of energy and its demand. Our task as an industry is to meet today’s challenges while continuing to invest to meet tomorrow`s demand, safely and sustainably,» he added.
It seems like Saudi Arabia has a new strategy. They are pumping more oil despite weak oil prices, and their acute pressure to cut production is off. The heavyweight of OPEC is less concerned about the price of crude oil, and more concerned about delivering fuel to its growing economy.
Kuwait and the United Arab Emirates are also drilling at record rates, while Iraq is shrugging off widespread civil conflict to increase production. Even Iran is preparing plans to develop more oil fields. The surging output has taken much of the mystery out of what the delegates of the 12 OPEC countries will do when they assemble in Vienna this week to set production levels for the next six months.
The oil prices is stable at around $60 a barrel, and OPEC has already pushed the cartel`s output 3 percent above the current target, and production appears to be heading even higher. Saudi Arabia was the primary force that made OPEC the swing producer in global markets, for decades.
«Is Saudi Arabia still willing to play the swing producer and juggle the whole domestic economy, refineries, power plants, desalination, petrochemicals, just to meet the expectations of either OPEC or no-OPEC producers? The answer is no, obviously not,» said Sadad Ibrahim al-Husseini, a former executive vice president for Saudi Aramco, the state oil company.
After Saudi Arabia`s production peaked in 1980, it cut supplies later in the decade and again in the 90`s to top up prices. The Saudis followed the same playbook when oil prices briefly sank during the 2008 global financial crisis and the economy slump the next year.
When political turmoil rocked Libya, another producer, during the Arab Spring, Saudi Arabia increased production to keep markets and its own revenue stable.
Energy consumption in Saudi Arabi is growing and its growing at an average of 6 percent over the last decade, while any shift to nuclear power or renewable sources like solar has been slow.
«No cut is coming,» said Rene G. Ortiz of Ecuador, a former secretary-general of OPEC. «Each and every country, and particularly the Saudis and the other monarchies of the gulf, will protect their market share and increase their market share as much as possible,» he said.
Chesapeake Energy Corp and Exxon Mobil Corp are both shale drillers. They both spent about $120 billion last year in the U.S, and the surge in output and a slowdown in the demand have pushed crude oil prices down.
The number of rigs drilling in shale fields are down by half from an October peak, BP Chief Executive Officer Bob Dudley said.
«The shale revolution hasn`t run out of steam in the U.S,» Dudley said.
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