Eni CEO talks about the Oil Market

Saturday, October 10, 2009

Eni SpA CEO said Sunday that the turbulence in oil prices is unprecedented and is "extremely bad news" for the industry.

Paolo Scaroni spoke at the Global Competitiveness Forum, "Our sector is no stranger to cycles", "But the turbulence we are currently experiencing — with oil doubling in the nine months to July 2008 and then losing two-thirds of its value in the following six months — is unprecedented."

"It is also extremely bad news for an industry like ours, where a five-year view counts as short term" he added.

He told The Associated Press after the conference that some complex projects in very deep waters and in difficult areas of the world "might be jeopardized at this level of oil price."

Scaroni said, however, that Eni and other companies are forecasting a long-term price of around 50, a level that he said is "certainly viable for conventional oil projects."

Will these low prices affect oil supply long term, and send prices way higher when demand recovers? I think so.

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