Oil majors are cutting capital expenditure in response to lower prices and Colver Technologies says more cuts are almost certainly on the way.
Colver Technologies has warned that the blood-letting in oil production is only just beginning and that investors should expect deeper cuts this year as weak demand in Europe and China continues to act as a drag on any meaningful and sustained rally in prices. BP announced it was cutting expenditure by almost $3 billion in 2015 while Russian state producer, Gazprom, unveiled cuts totaling almost $8 billion.
Gus Stuyvesant, COO at China-based small-scale GTL solutions provider, Colver Technologies, said, “When people like BP, CNOOC and Gazprom are cutting expenditure, you know they’re expecting conditions to remain challenging for some time.”
The company’s warning comes as the number of oil rigs mothballed in the US hit 90 by the end of last week but Stuyvesant advised oil bulls to postpone any premature celebrations. “We think it’ll be some time before the cut in supply resulting from ending production at these rigs works its way through to higher prices in the market because, right now, it’s mostly the low-yielding rigs that are being decommissioned.”
Oil prices rallied marginally earlier this week as a slowing in the rate of declines saw some to speculate that prices were close to bottoming but their hopes were dashed as a build in US inventories and a weak demand picture out of China helped to limit gains.
Colver Technologies says it is enjoying a surge in demand for its GTL/CTL solutions from producers who want to increase revenue without committing to further major capital expenditure on conventional drilling operations. “Our GTL reactors are proving to be particularly attractive to some of the smaller producers who don’t necessarily want to work more wells but welcome the additional revenue from the sale of premium products like diesel and aviation fuel,” concluded Stuyvesant.
About Colver Technologies
Colver Technologies’ modular GTL systems revolve around the Fischer-Tropsch reactor, a conversion technology developed in the 1920s by Franz Fischer and Hans Tropsche in Germany in 1925. It facilitates the production of significantly cleaner-burning liquid fuels like diesel and jet fuel from natural gas that contains no sulfur. We are committed to doing our part to drive uptake of GTL fuels as global efforts to reduce emissions increase and have invested heavily to ensure the continuing development of this highly attractive alternative to conventional energy production.
Contact Colver Technologies:
Longzhimeng Asia-Pacific Center
22 Pangjiang Street
Dadong, Shenyang, Liaoning
China
contact@colvertech.com
http://www.colvertech.com
862422599383