'Selfish' oil firms relish new production despite glut

Thu Feb 18, 2016 8:30am EST
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* New fields to add 3 mln bpd of oil in 2016 - Rystad

* More than $220 bln of projects scrapped since 2014

* New production to delay market rebalancing

By Ron Bousso

LONDON, Feb 18 (Reuters) - As oil firms scrap dozens of billions worth of mega projects essential for supplies in decades ahead, fresh output from huge fields already being developed is set to weigh for many more months on an oil market struggling to shake off a glut.

A collapse in oil prices over the past 20 months to below $30 a barrel has taken a heavy toll on production around the world, reversing spectacular growth in U.S. shale oil and halting plans to develop costly and complex fields deep in oceans or treacherous seas such as the Alaska Arctic.

But companies that have been investing often more than $10 billion in projects that were approved in the first half of the decade, when oil fetched in excess of $100 a barrel, are pushing ahead with many of their developments.

These include the TEN field off the coast of Ghana, operated by British company Tullow Oil, which is set to start production in the middle of this year, expansions at Chevron's Jack/St Malo field in the Gulf of Mexico and at Cenovus' Foster Creek oil-sands field in Canada.

Around 3 million barrels per day (bpd) of oil production is set to come on stream in 2016 from projects whose development started as early as 2013, according to Oslo-based consultancy Rystad Energy.   Continued...