Oil is a volatile commodity, and the market is being reminded of that, Elias Kassis told an audience gathered for a forum discussing Lebanon’s oil and gas potential held May 26 in Beirut.
Kassis is the vice president of the Middle East and North Africa division of Total, the French oil and gas “supermajor.” Last year marked the end of a nearly decadelong run during which a barrel of oil sold for more than $50 on average. Prices began to fall in June 2014, and — as of press time — were still below $50 despite briefly surpassing that threshold on May 26.
As drilling for oil and gas is not cheap, one of the first places oil and gas companies turn to trim costs during a price drop is their exploration and production divisions. Kassis said Total has reduced its exploration and production budgets and deferred investments. That said, the search for more supply never grinds to a complete halt. Case in point: Total reversed an early 2015 decision to completely abandon exploration efforts in Cyprus after the late 2015 discovery of a giant gas field in neighboring Egyptian waters, not far from where the French company had drilling rights.