Oil Prices, Post-Sanction Iran Prompt GCC Maintenance Cost Cutting

Oil Prices, Post-Sanction Iran Prompt GCC Maintenance Cost Cutting

Industry sources have informed Reuters that Gulf oil producers are delaying some field maintenance until next year to keep production high and reduce costs, forecasting weaker oil prices in 2016.

The sources, however, were not able to learn which fields were affected, given the sensitivity of the data.

They told Reuters that OPEC members Saudi Arabia, United Arab Emirates and Qatar are rescheduling non-essential maintenance work at oilfields originally planned for the last quarter of this year later into 2016, again due to low oil prices.

“The non-urgent maintenance is definitely being pushed. We see huge focus on production in Qatar, Abu Dhabi and Saudi Arabia,” one industry source revealed, adding, “They are delaying to keep production high, if they shut down now they will not produce, and they also have to preserve cash.”

A particular concern for the producers is Iran, when sanctions are finally removed.

According to Trade Arabia delaying maintenance work is also a way to rein in spending, since such operations often involve bringing in specialist foreign companies.

Even the other Arab producers were reviewing oil investments plans and asking for cost cuts.

Iraq has already told foreign companies that they may need to slash development spending next year.

Saudi Arabia and the UAE however, seem to be holding steady and sticking to their original schedules.

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