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A new oil plateau
Fereidun Fesharaki, Chairman and Chief Executive Officer, FACTS Global Energy, shares his oil industry outlook by asking the right questions
Fereidun Fesharaki’s high-level analyses and opinions are in demand. But the leading energy economist, who is widely respected for his pioneering analyses of the Asia Pacific and Middle East energy markets, calculates that he is misquoted in the press around two-thirds of the time. Fesharaki addressed the 2008 Shell Global Solutions Executive Summit determined to share his insights without corruption by posing his own incisive questions, to which he gave refreshingly frank answers.
He began by looking at the future price of oil and asking whether we are running out of oil. His reply was, “Geologically no; practically yes.” Fesharaki put the geological limit of conventional oil at 115–120 million barrels a day, but he went on to stress that the practical limit is, without considering the contribution that unconventional oil and natural gas liquids might make, 95–100 million barrels a day, with the lower value being more likely.
Fesharaki dismissed the roles of speculators and geopolitics in pricing as minor, stressing, “The market has got the message. We will reach practical oil limits in a few years, and prices must rise to apportion supplies.”