Where is the Oil Industry Heading?

Always central to global growth, and always volatile, the oil industry is facing transformation. In an interview given to Åsa Borssén from RAW TalksDr Carole Nakhle, CEO of Crystol Energy, talks about the fundamental developments shaping the oil industry today, including the shale oil revolution and the upcoming transition to a low-carbon future. The interview was recorded in July 2017.

Dr Carole Nakhle and Åsa Borssén discuss the fundamental developments shaping the oil industry today

Asked whether producers’ loss is consumers’ gain, Dr Nakhle explains that this is not necessary the case today especially that the importance of oil in today’s global economy is lower compared to what it was in 1970s primarily thanks to efficiency improvements. The lower price environment post summer 2014 has added pressure on oil-dependent countries, but that is an opportunity for them to diversify their economies. Consumers usually benefit from lower prices, but that depends on several factors including whether they are fully exposed to changes in oil prices.

Dr Nakhle also discusses the structure of the oil and gas industry today and how it has evolved since 1970s, especially the rise of the National Oil Companies. She further describes the role of OPEC and how the organisation’s strategy has changed since summer 2014. The discussion touches on Saudi Arabia’s decision to privatise part of Saudi Aramco. Dr Nakhle questions whether an opening of the upstream oil and gas sector to international investors would have been more effective and easier to implement than the IPO.

Dr Nakhle also gives an overview of the main factors that shape investment decision, emphasising the importance of the fiscal terms as the main tool in government hands. Asked whether hydrocarbons and climate change concerns can coexist, Dr Nakhle comments that they already do, cautioning that the transition to greener cleaner future is not going to happen overnight.

Watch the full interview