PROSPECTS FOR LIBERIA NEW FRONTIER OIL EXPLORATION DAMPENED - As we predicted weeks ago, companies involved in oil operations have scale down their operations due to the sinking price of crude oil on the international market. Over the past few weeks, two of the largest oilfield service companies, Slumber J and Williams have relieved ten thousand (10,000) workers from the US Gulf Coast oil and gas operations alone. Slumber J is one of a few companies contracted to explore for oil on Liberia offshore oil blocks. The price of oil has also tempered down the high expectation for the controversial Tar Sands Keystone Pipeline from Canada through the United States to Texas refineries. Normally during times of low oil price, the major producers, Saudi Arabia, Venezuela etc would reduce supply to push the price back up. They are not doing that right now because the believe that effort is futile consider new variables. In this case, there are new industrial disruptive agents that has created a new dynamism. There has been in the past few years increased production of oil and gas in the United States due to the deployment of new technologies (i.e. Hydrolic fracturing) and the significant increase in alternative energy sources (solar, fuel cell, wind etc). The world seem to be slowly but surely moving away from crude oil as the primary source of energy. This timing is not good for countries like Liberia who have just started to explorer the wealth generation potential in that sector. Liberia and others like her should begin to rethink their economic strategy. Agriculture has always been the best bet for Liberia. Think about it, if operational wells that are producing crude oil now are being shut down because of low product price, is any sound company going to continue to put money into expensive offshore exploration under these circumstances?
Posted on: Wed, 21 Jan 2015 17:20:07 +0000
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