Representatives from governments and industry are convened this week in Davos, Switzerland for the World Economic Forum. 2,500 heads of state, industry leaders, artists and philanthropists are gathering with the goal of "improving the state of the world." A predictably hot topic being discussed has been the drastic fall in oil prices since June.

The CEO of Eni, Italy's O&G supermajor, warned at the conference that oil prices could rise up to $200 per barrel if OPEC fails to cut supplies. Claudio Descalzi said, "A lot of our projects are long term to have production in five or six years. And that is a problem. If you are cutting capex drastically now - we can have a lack of production in four or five years creating a new increased oil price at $200 maybe."

"What we need is stability... OPEC is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way," he continued.

The Eni executive said on the sidelines of the conference that the oil industry would reduce capital spending by 10-13% this year due to falling prices. But he said the world should avoid a further massive drop in investment in E&P as this would yield oil shortages in the future, thereby leading to price increases.

http://oilpro.com/post/9893/supermajor-ceo-says-oil-could-go-to-200

Interesting conjecture I must say, something that should be looked into.

Ahh they better invite Buhari to that meeting!! For It is he and he alone who has the secret formulae for stabilizing the oil market.

Note that the gent said IF production is cut.....

But the trouble is....new producers. We have far more producers of oil outside OPEC than there are inside it. And more countries are discovering oil.

I don't expect a raise in the oil price. Anyone who says there would be a raise is just dreaming.

bushdoc9919:
Note that the gent said IF production is cut.....

But the trouble is....new producers. We have far more producers of oil outside OPEC than there are inside it. And more countries are discovering oil.

I don't expect a raise in the oil price. Anyone who says there would be a raise is just dreaming.

I quite agree with ur reasoning but if it is up for debate, then it is possible(talking about cutting supplies). Note he talked about opec cutting supplies. It really wont mattet too much who is a member or not, opec is a cartel and when dey determine output, and fix prices.. its like the gods have spoken.

He says IF opec does not cut production we can get to $200/bbl.
and the argument seems very plausible, thats one of the most experienced men in the business talking and is worth listening to.
the oil industry made a big mistake in the 80s to 90s (when companies weren't hiring) and I'm happy someone is warning already to make people think in a new direction.

NavierStokes:
He says IF opec does not cut production we can get to $200/bbl.
and the argument seems very plausible, thats one of the most experienced men in the business talking and is worth listening to.
the oil industry made a big mistake in the 80s to 90s (when companies weren't hiring) and I'm happy someone is warning already to make people think in a new direction.

If OPEC does not cut production, what will make the price go up to $200/bbl? Is he insinuating that continuous production now will lead to a shortfall in the future? I just need a plausible explanation to why price of oil will increase

Yea he if opec doesn't cut production, the glut remains, the price of oil drops or stays low, many investments are halted( recall that the fields that will provide the oil 5-6 years in the future are developed from today).
This causes a major shortfall in future supply with increasing world demand. And then what happens, not just a rise in price but a spike is what we will see. Something going very high. The guy has a strong point and highly experienced and shiuld be listened to.