DOCSLIB.ORG

The Petrodollars and the World Economy

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Petrodollars and the World Economy A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Lütkenhorst, Wilfried; Minte, Horst Article — Digitized Version The petrodollars and the world economy Intereconomics Suggested Citation: Lütkenhorst, Wilfried; Minte, Horst (1979) : The petrodollars and the world economy, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 14, Iss. 2, pp. 84-89, http://dx.doi.org/10.1007/BF02930203 This Version is available at: http://hdl.handle.net/10419/139600 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu RECYCLING The Petrodollars and the World Economy by Wilfried LStkenhorst, Horst Minte, Bochum * The quadrupling of the oil price by the OPEC in 1973 was a poignant event in the post-war develop- ment of the world economy. Which measures and mechanisms conduced to the international income redistribution 1 necessitated by the hoisting of the oil prices in the past five years? he raising of the oil price by the OPEC was importing countries was unable to acquire the re- T anything but a "normal" modification of rela- sources for the additional transfers to the oil ex- tive prices of traded goods even if the political porting states through trade with third countries; and psychological side issues are left out of ac- from the OPEC states alone could these resources count. It could not be otherwise, so large and be obtained. On the other hand it was to be ex- abrupt was the change and so outstanding is the pected that the different conditions of individual quantitative importance of mineral oils in interna- importing countries in regard to dependence upon tional trade and their strategic significance for the OPEC oil, ability to export to the OPEC area and industrialization and economic growth processes attractiveness for petrodollar investments would of the oil importing countries. How then was it bring about major shifts inside the bloc of oil im- possible for the near-panic engendered by the ex- porting countries. pectation of continuing accumulation of foreign [] Secondly, the process of income redistribution currency holdings by the OPEC states to be su- was conceived to be a continuous one; unlike rep- perseded by wide-spread trust in the effectiveness aration payments for instance which are made of the petrodollar recycling mechanism and the once and not again, it posed special problems of ability of the international economic system to structural adjustment to a permanently worsened cope successfully with this problem? 2 distribution of trade gains (terms of trade), to al- tered cost structures and changes in national and The Petrodollar Problem sectoral export patterns. In the OECD countries the petrodollar problem [] Thirdly, the transfer had been forced on the has often been discussed in the historic context industrialized states by developing countries, a fact which kept alive the hope that the OPEC of "classic transfer problems" such as occur in cartel might collapse as the result of military or connection with war debts and reparations. The analysis therefore operated in similar categories 3 political action or simply through the working of There are however significant specific features of market forces, so that appropriate economic ad- justments could be avoided, while it created at the the petrodollar problem which must not be ig- same time much uncertainty about the likely con- nored: [] The first one is that all important trading na- 3 G. Tic h y, iOIkosten - ein Transferproblem (Oil costs - a transfer problem), in: Sparkasse, No. 2/1975, p. 29 ft., on the basis tions belong to one or other of two blocs facing of F. M a c h I u p, Das Transferproblem -- Thema und vier Varia- tionen (The transfer problem - theme and four variations), in: each other 4, with the result that the bloc of the oil ORDO 1963, p. 139 ff.; J. W e I c k e r, I~lschulden als Transfer- problem (Oil debts as a transfer problem), in: Konjunkturpolitik * Ruhr-Universit&t Bochum. 1975, p. 71 ff.; H. B. O h e n e r y, Restructuring the World Econ- omy, in: World Development, No. 10-12, 1975, p. 3ft.; W. L (J t- 1 According to Triffin this involved 1.8% of the GNP of the k e n h o r s t, H. M i n t e, Probleme des monet&ren und realen OECD states. This average applies also to the Federal Republic Transfers. Die Aufbringung und Verwendung tier Petrodollar of Germany; for the EC the redistribution amounted to 2.4%. (Problems of monetary and real transfer. The generation and (Quoted from Y. S. P a r k, Oil Money and the World Economy, utilization of petrodollars), in: M. T ietzel (ed.), Die Energie- Boulder, Colorado, 1976, p. 79.) krise: FSnf Jahre danach (The energy crisis: Five years later), Bonn 1978, p. 37 ff. (English edition forthcoming). 2 Cf. "Die Katastrophe fand nicht statt" (The catastrophy did not take place), a euphemistic article dealing only with the outlook 4 The centrally planned economies and the quantitatively insig- for the well-performing industrialized countries, in: Die Zeit, Oc- nificant oil exporting countries outside the OPEC are disregarded tober 13, 1978, p. 18. in this simplifying bipartite view. 84 INTERECONOMICS, March/April 1979 RECYCLING duct of these states in the international commod- in view of the existing currency and inflation risk 6 ity and financial markets. the OPEC states could not be interested in accu- mulating an unlimited amount of petrodollars, the Collection and Utilization of Petrodollars less so as the acquisition of real assets abroad, which would have done most to lessen the infla- The effectuation of the real transfer of petrodol- tion risk, tended to cause resistance in the recip- lars - and under comparative-static aspects this ient countries. alone is of interest - is in actual fact achieved through adjustment processes. The petrodollar Against a maximization of the adjustment velocity problem proper arises from the concrete reper- and, thus, the immediate effectuation of the real cussions of these processes on individual actors transfer operated the limitations on the internal and the need and means for their political control. absorptive capacity of the OPEC countries them- The internal collection of the petrodollars in the selves. These have been the subject of many dis- oil importing countries posed no problem in this cussions; in the early prognoses on the accumu- context inasmuch as - this was one effect of the lation of petrodollars they were greatly overrated. oil shock syndrome - neither subsequent pro- Bearing in mind the limited number of short-term ducers nor the final consumers offered any resis- investment opportunities and the lack of comple- tance to the additional costs being passed on to mentary production factors (human capital, infra- them. structure) in most OPEC countries, the case for short-term transformation of the petrodollars into In monetary terms the external provision of the imports seemed however unrealistic. petrodollars by the bloc of oil importing states was, likewise, relatively unproblematic inasmuch Immediate real transfers also faced serious ob- as the OPEC states had no choice but to accept stacles from the point of view of the oil importing payment in the currencies of the importing states countries: in the first place it seems reasonable in settlement of their current account surpluses - to ascribe the limited absortive capacity of certain at least as long as they abstained from balancing OPEC countries in some part to the unavailability their current accounts by reducing exports, which of innovative supplies matching the specific needs was politically out of question. and factor equipment of the OPEC states and to the absence of appropriate marketing concepts in As the OPEC states would not however accept all the industrialized states. Moreover, the interpos- the currencies of the oil importing states but pay- ments in the international oil trade are for the ing of a transition period made it also easier for the oil importing states to establish new produc- most part made in US dollars, many oil importing tion patterns on the supply side and mitigated the states had to turn to the international capital mar- need for domestic adjustments on the demand kets or draw on bi- or multilateral public credits to effect the necessary monetary transfers. Pro- side, for many of these states decided to reduce the cost pressure due to higher oil prices by a posals to introduce a basket of currencies as unit of account - as is regularly suggested whenever suitable monetary policy. Had the OPEC states in the dollar runs into a crisis - would leave the pre- this situation insisted on full-scale real transfers dominant position of the US-dollar unchanged. and used all their petrodollars for the purchase of goods, the already existing structural and supply- At the same time the OPEC states had to look for oriented inflationary impulses would have been profitable outlets for their financial assets, which reinforced by substantial impulses from the de- they could only find in the big capital markets of mand side 7.
Load more

Recommended publications
  • Energy Prices, Business Cycles, and Financial Crises the Argument for Cycle Attenuation
    Business and Financial Cycles Post-Bretton-Woods Problems Energy Prices, Business Cycles, and Financial Crises The Argument for Cycle Attenuation Mahmoud A. El-Gamal & Amy M. JaVe Rice University & Baker Institute for Public Policy October 2008 Mahmoud A. El-Gamal & Amy M. JaVe – London, October 27, 2008 Energy Prices, Business Cycles, and Financial Crises Business and Financial Cycles Financial Crises and Energy Prices Post-Bretton-Woods Problems The Role of Recycled Petrodollars Frequency and Causes of Crises Globalizations Past and Present Reckless Lending Era 1850s–1870s: Major currency and banking crises Gold Standard Era 1880–1913: Some currency and banking crises Between Wars 1919–1939: Numerous currency and banking crises Bretton Woods 1945–1971: Many currency crises but no banking crises Dollar Era 1973–present: Numerous currency & many banking crises Trade surpluses, Reckless Lending, and Recent Crises 1980–present: 1980s Scandinavia & Latin America: Reckless lending fueled bubbles that collapsed with oil prices, leading to currency and banking crises 1990s Japan, Asia: Supporting the Dollar and reckless lending fueled bubbles, which burst with tightened monetary policy, banking crisis 2000s Contagion + record U.S. debt pose substantial global-systemic risk Mahmoud A. El-Gamal & Amy M. JaVe – London, October 27, 2008 Energy Prices, Business Cycles, and Financial Crises Business and Financial Cycles Financial Crises and Energy Prices Post-Bretton-Woods Problems The Role of Recycled Petrodollars Coincidence of High Oil Prices with Financial Crises Crises Severest 1850s-70s (before gold standard), and 1970s– (after Bretton Woods) 120 100 80 60 Brent Oil Price in 2006 Dollars 40 20 0 1860 1880 1900 1920 1940 1960 1980 2000 Mahmoud A.
    [Show full text]
  • Monthly Report on Petroleum Developments in the World Markets February 2020
    Monthly Report on Petroleum Developments in The World Markets February 2020 First: World Oil Markets 1. Oil Prices In December 2019, OPEC Reference Basket increased by 5.7% or $3.6/bbl from the previous month level to stand at $66.5/bbl. Improved oil fundamental balances and continued market stabilization efforts conducted under OPEC+ Declaration of Cooperation, as well as easing trade tensions between the US and China were major stimulus for the increase in oil prices during the month of December 2019 to reach its highest monthly level since April 2019. Weekly Average Spot Prices of OPEC Basket of Crudes, 2018-2019 ($/bbl) 80 70 60 50 40 30 20 10 0 Dec. Jan. Feb. Mar. April May June July Aug. Sept. Oct. Nov. Dec. 2018 2019 Source: Organization of Petroleum Exporting Countries, Monthly Oil Market Report. 2. Supply and Demand World oil demand in December 2019, decreased by 1.6 million b/d or 1.6% from the previous month level to reach 100.3 million b/d. Demand in OECD countries decreased by 2.3% comparing with the previous month to reach 47.3 million b/d. And demand in Non-OECD countries decreased by 0.9% comparing with their previous month level to reach 53 million b/d. World oil supplies in December 2019, decreased by 100 thousand b/d or 0.1% comparing with the previous month to reach 101.8 million b/d. 1 Non-OPEC supplies remained stable at the same previous month level of 67.2 million b/d. Whereas preliminary estimates show that OPEC crude oil and NGLs/condensates total supplies decreased by 0.6% comparing with the previous month to reach 34.5 million b/d.
    [Show full text]
  • GCC Oil Exporters and the Future of the Dollar Forthcoming in New Political Economy
    Title: GCC Oil Exporters and the Future of the Dollar Forthcoming in New Political Economy Author: Bessma Momani- Assistant Professor University of Waterloo and Senior Fellow, Centre for International Governance and Innovation Bio: Dr. Bessma Momani is Assistant Professor at the University of Waterloo and a Senior Fellow at the Centre for International Governance and Innovation. Dr. Momani has written on the US Middle East Free Trade Area, Euro-Med initiative, economic integration of the GCC, EU-GCC free trade agreement, economic liberalization in Egypt, and extensively on the International Monetary Fund. In addition to three monographs, her articles have appeared in World Economics, International Journal, Review of International Political Economy, Review of International Organizations, World Economy, Global Society, Middle East Review of International Affairs, New Political Economy, Canadian Journal of Political Science, and Asian Affairs. Abstract: Since the early 1970s, the oil-exporting states of the Gulf Cooperation Council (GCC) led by Saudi Arabia, have played a key role in supporting the value of the US dollar by invoicing oil trade oil in dollars and by investing in US dollar reserves and securities. However, the United States‟ negative fiscal and current account positions have made many nervous about the sustainability of the US dollar as an international reserve currency. This article asks whether the GCC oil exporters will undermine the future of the dollar. Three factors are considered: the GCC‟s influence in changing the dollar-based invoicing of oil; emerging patterns in petrodollar recycling; and, the potential for diversification of GCC official reserves. The findings of this article suggest that despite some economic rationales in favour of loosening ties to the dollar, in the short term at least, the GCC will remain loyal to the dollar for political and security reasons.
    [Show full text]
  • Peak Oil Demand and Long-Run Oil Prices
    January 2018 Peak Oil Demand and Long-Run Oil Prices Abstract The prospect that global oil demand will gradually slow and eventually peak has created a cottage industry of executives and commentators trying to predict the point at which demand will peak. In this Energy Insight, we argue that this focus seems misplaced. The date at which oil demand will stop growing is highly uncertain and small changes in assumptions can lead to vastly different estimates. More importantly, there is little reason to believe that once it does peak, that oil demand will fall sharply. The world is likely to demand large quantities of oil for many decades to come. Rather, the significance of peak oil is that it signals a shift in paradigm – from an age of (perceived) scarcity to an age of abundance – and with it is likely to herald a shift to a more competitive market environment. This change in paradigm is also likely to pose material challenges for oil producing economies as they try both to ensure that their oil is produced and consumed, and at the same time diversify their economies fit for a world in which they can no longer rely on oil revenues to provide their main source of revenue for the indefinite future. We argue that the extent and pace of this diversification is likely to have an important bearing on oil prices over the next 20 or 30 years. It seems likely that many low-cost producers will delay the pace at which they adopt a more competitive “higher volume, lower price” strategy until they have made material progress in reforming their economies.
    [Show full text]
  • Welcome to the 11Th Edition of Energy Perspectives! This Is An
    Welcome to the 11th edition of Energy Perspectives! This is an independent report that informs Equinor’s strategy and offers a fact-based contribution to the energy transition debate. This year’s edition is an update of the edition from November last year, and with a lot happening on the global arena the last 6 months, there is a lot to consider when looking 30 years ahead. As always, this report and its data and conclusions would be impossible without the excellent work of many of my colleagues, to whom I extend my appreciation and gratitude. You are the best! 1 Covid19 is not over. In a global perspective, we are still dealing with its impact and the enormous effects it has on people, societies, economies, and markets. We are not through it yet. And we might have to live with recurring infection spikes, especially in parts of the world that do not get sufficient access to vaccines. Recurring lockdowns entailed that energy demand, and in particular oil demand due to its use as a transport fuel, was hit hard. Recovery is in the making, and faster than many feared, but oil demand, as an example, is still not back to pre-Covid19-levels. The map shows how the pandemic has affected economies across the globe, with almost all countries pink or red, that is, with negative economic development. Industrialised countries are on their way out of recession while disabling the virus, but the uncertainty is still high in many emerging economies. 2 We are seeing signs of recovery. Thanks to the development and rollout of vaccines and massive public spending to stimulate demand, there are signs that the situation is being brought under control so that we can live with the virus more like we do with normal flus.
    [Show full text]
  • Market Indicators As at End*: August-2020
    MARKET INDICATORS AS AT END*: AUGUST-2020 Spot Price of OPEC Basket & Selected Crudes Refiners' Margin Real Price of OPEC Basket (US$/b) (US$/b) Aug-18 Aug-19 Aug-20 2018 2019 2020# US Gulf N. Europe Singapore Basket 72.26 59.62 45.19 69.78 64.04 40.50 LLS WTI A. Heavy Brent Oman Arab Light Dubai 72.47 58.88 43.89 69.68 63.48 41.54 Jun-20 3.92 5.19 0.42 0.42 -0.74 1.02 North Sea Dtd 72.64 58.83 44.79 71.22 64.19 40.88 Jul-20 4.64 6.13 -1.86 1.30 1.26 1.99 WTI 67.99 54.84 42.36 65.16 57.02 38.15 Aug-20 3.67 5.30 -2.05 0.16 0.86 0.87 Real Basket Price Jun01=100 46.86 39.02 28.30 35.22 44.73 26.19 NYMEX WTI Forward Curve (US$/b) Basket Price (US$/b) Differentials (US$/b) May-20 Jun-20 WTI-Brent Brent-Dubai Jul-20 Aug-20 50 100 3 90 2 45 2018 80 1 70 40 0 60 35 2019 -1 50 30 40 -2 2020 -3 25 30 20 -4 20 10 -5 1M 3M 5M 7M 9M 11M J F M A M J J A S O N D 03 05 07 11 13 17 19 21 25 27 31 Crude Oil Production (tb/d) Closing OECD Oil Stocks - Crude/Products Commercial and SPR (Mb) Crude Oil Production (Tb/d) Production: Secondary Sources Change Diff.
    [Show full text]
  • NEWS RELEASE June 15, 2021
    925 North Eldridge Parkway Houston, TX 77079 Media Relations: 281-293-1149 www.conocophillips.com/media NEWS RELEASE June 15, 2021 ConocoPhillips to Host Market Update June 30 HOUSTON – ConocoPhillips (NYSE: COP) will host a virtual market update on Wednesday, June 30 beginning at 9:00 a.m. Central time. The meeting will feature presentations by ConocoPhillips executives, including Chairman and Chief Executive Officer Ryan Lance. A live webcast of the meeting will be made available on the ConocoPhillips Investor Relations website, www.conocophillips.com/investor. The event will be archived and available for replay later that day. The presentation, along with a transcript, will also be available on the Investor Relations website. --- # # # --- About ConocoPhillips Headquartered in Houston, Texas, ConocoPhillips had operations and activities in 15 countries, $84 billion of total assets, and approximately 10,300 employees at March 31, 2021. Production excluding Libya averaged 1,488 MBOED for the three months ended March 31, 2021, and proved reserves were 4.5 BBOE as of Dec. 31, 2020. For more information, go to www.conocophillips.com. Contacts Media Dennis Nuss 281-293-1149 [email protected] Investor Relations 281-293-5000 [email protected] CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This news release contains forward-looking statements as defined under the federal securities laws. Forward-looking statements relate to future events and anticipated results of operations, business strategies, and other aspects of our operations or operating results. Words and phrases such as “anticipate," “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict," “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and other similar words can be used to identify forward-looking statements.
    [Show full text]
  • The Economic Impact of Oil Prices by Rurik Krymm
    The Economic Impact of Oil Prices by Rurik Krymm During the last three months of 1973, the tax-paid costs of typical grades of crude petroleum in the main producing areas of the world, around the Persian Gulf, were roughly quadrupled, rising for typical Iranian and Arabian Ugh t crudes from about $1.85 per barrel in September 1973 to more than $7.00 by 1 January 1974, or from approximately $13.30 to more than $50.00per ton. Since the cost of production represents an insignificantly small fraction of the new cost level (less than 2%) and subject to complex adjustments reflecting varying qualities of crude oils and advantages of geographical location, the producing countries may expect to receive a minimum average revenue of $50.00 per ton of crude oil produced on their territory instead of $12.50. If we ignore the purchases which carried the prices of relatively small amounts of oil to the $100-$ 150range, this figure of $50.00per ton with future adjustments for inflation represents a probable guide line for future cost estimates. The change affects exports of close to 1.4 billion tons of oil and consequently involves an immediate shift of financial resources of close to 60 billion dollars per year from the oil-consuming to the oil-producing countries. Tables 1, 2 and 3 give an idea of the distribution of this burden by main geographical regions and of its possible evolution over the next seven years. The figures involved are so large that comparisons have been made by some authors with the reparations proposals advanced by the Allies at the end of the First World War.
    [Show full text]
  • OPEC Annual Statistical Bulletin 2019 1 Contents
    2019 OPEC Annual Statistical Bulletin Organization of the Petroleum Exporting Countries 1965 – 2019 th edition 54 Team for the preparation of the OPEC Annual Statistical Bulletin Secretary General Editorial Team Chairman of the Editorial Board Head, Public Relations and Information Department Mohammad Sanusi Barkindo Hasan Hafidh Director, Research Division Editor Ayed S. Al-Qahtani Maureen MacNeill, Mathew Quinn Project Leader Coordinator, Design and Production Head, Data Services Department Carola Bayer Adedapo Odulaja Senior Production Assistant Coordinator, Statistics Team Diana Lavnick Hossein Hassani Graphic Designer Statistics Team Tara Starnegg Pantelis Christodoulides, Klaus Stöger, Mohammad Sattar, Mihni Mihnev, Justinas Pelenis, Ksenia Gutman Coordinator, IT Development Team Mohamed Mekerba IT Development Team Vedran Hrgovcic, Zairul Arifin Online Annual Statistical Bulletin 2019: asb.opec.org Download now: Smart App for OPEC Annual Statistical Bulletin iOS Android Questions on data Data queries: [email protected]. Advertising The OPEC Annual Statistical Bulletin now accepts advertising. For details, please contact the Head, PR and Information Department, at the following address: Organization of the Petroleum Exporting Countries Helferstorferstrasse 17, A-1010 Vienna, Austria Tel: +43 1 211 12/0 Fax: +43 1 216 43 20 Advertising: [email protected] Website: www.opec.org Photographs Courtesy OPEC. © 2019 Organization of the Petroleum Exporting Countries ISSN 0475-0608 Contents Foreword 5 Key messages 6 Tables Page Page Section
    [Show full text]
  • World Oil Outlook 2040
    Organization of the Petroleum Exporting Countries 2019 World Oil Outlook 2040 2019 World Oil Outlook 2040 Organization of the Petroleum Exporting Countries Digital access to the WOO: an interactive user experience 24/7 OPEC’s World Oil Outlook (WOO) is part of the Organization’s commitment to market stability. The publication is a means to highlight and further the understanding of the many possible future challenges and opportunities for the oil industry. It is also a channel to encourage dialogue, cooperation and transparency between OPEC and other stakeholders within the industry. As part of OPEC’s ongoing efforts to improve user experience of the WOO and provide data transparency, two digital interfaces are available: the OPEC WOO App and the interactive version of the WOO. The OPEC WOO App provides increased access to the publication’s vital analysis and energy-related data. It is ideal for energy professionals, oil industry stakeholders, policymakers, market analysts, academics and the media. The App’s search engine enables users to easily find information, and its bookmarking function allows them to store and review their favourite articles. Its versatility also allows users to compare graphs and tables interactively, thereby maximizing information extraction and empowering users to undertake their own analysis. The interactive version of the WOO also provides the possibility to download specific data and information, thereby enhancing user experience. Download Access the OPEC WOO App interactive version Available for Android and iOS OPEC is a permanent, intergovernmental organization, established in Baghdad, Iraq, on 10–14 September 1960. The Organization comprises 14 Members: Algeria, Angola, Republic of the Congo, Ecuador, Equatorial Guinea, Gabon, the Islamic Republic of Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela.
    [Show full text]
  • Conocophillips Completes Acquisition of Concho Resources
    925 North Eldridge Parkway Houston, TX 77079-1175 Media Relations: 281-293-1149 www.conocophillips.com/media NEWS RELEASE Jan. 15, 2021 ConocoPhillips Completes Acquisition of Concho Resources HOUSTON – ConocoPhillips (NYSE: COP) today announced that it has completed its acquisition of Concho Resources (“Concho”) (NYSE: CXO) following approval by shareholders of both companies. “We appreciate the strong support for this transaction from the shareholders of both companies, which we view as further affirmation of the significant benefits it will deliver,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. “This acquisition results in the combination of two premier companies that can lead the structural change for our vital industry that’s critical to investors. We expect the company to deliver differential performance on three key mandates: providing affordable energy to the world, generating superior returns on and of capital and demonstrating ESG leadership.” Lance added, “I also welcome Tim Leach to ConocoPhillips’ board of directors and executive leadership team. Tim and his organization built a best-in-class Permian company and we both look forward to creating significant value from this transaction. Thanks to the considerable efforts of our transition teams over these past few months, we’re off to a fast start toward seamlessly integrating our two companies and building momentum as a sector leader.” ConocoPhillips and Concho will each file the vote results for their respective special shareholder meetings on a Form 8-K with the U.S. Securities and Exchange Commission. In accordance with the terms of the merger agreement, each share of Concho common stock was converted into the right to receive 1.46 shares of ConocoPhillips common stock at the effective time of the merger.
    [Show full text]
  • Oil Production Capacity Expansion
    Third OPEC International Seminar OPEC in a New Energy Era: Challenges and Opportunities 12-13 September 2006,Vienna, Austria Oil Production Capacity Expansion HE Dr Chakib KHELIL, Minister of Energy and Mines, Algeria Outline I. Prospects for Oil Demand & Supply II. OPEC Upstream Capacity Expansion Plans III. NOC/IOC Co-operation IV. Concluding Remarks 1 I. Oil Demand & Supply World Primary Energy Demand Million toe Source: OPEC 2 I. Oil Demand & Supply Conventional & Non-Conventional Oil Resource Conventional oil: Non-Conventional Oil: ~6-8 Trillion barrels of oil in place ~7 Trillion barrels of oil in place Remaining Tar Sands Recoverable Tar Sands Produced OilOil ShalesShales && BitumenBitumen 38%38% 39%39% Enhanced ExtraExtra Oil Recovery Heavy Oil Target Heavy Oil 23%23% Challenge : Challenge : Improved recovery technologies Cost-effective extraction technologies needed needed Source: IEA World Energy Outlook 2004 3 I. Oil Demand & Supply Proved Reserves vs. Non-OPEC Supply Growth Proved (Oil) Reserves Non-OPEC Supply Growth Billion barrels Year on Year Changes (mb/d) 1200 2,000 1,500 900 1,000 500 600 0 OPEC 300 -500 FSU FSU Non-OPEC Ex FSU -1,000 Non-OPEC 0 -1,500 1980 1984 1988 1992 1996 2000 2004 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Est Est Source: BP 4 I. Oil Demand & Supply Increase in Demand Met by OPEC 1,000 b/d 2500 2300 1900 2000 1500 1400 1500 1100 1100 1000 800 800 500 400 500 300 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 -500 -500 -1000 -1500 -1400 -1600 -2000 NB: Figures include crude oil, condensates and NGL’s Source: IEA 5 II.
    [Show full text]