April 25, 2007
Bad times for Big Oil
The World National Oil Companies Congress has been a relatively diplomatic affair so far, save for one very frank paper, submitted by Helmut Langanger, executive vp of exploration and production for OMV. Mr Langanger said what international oil company executives rarely admit: "IOCs will more and more change from operator to a service provider with pre-agreed reimbursement figures hereby substantially diminishing rates of return. Reduced profitability will lead to IOCs not delivering on major performance indicators, such as annual production growth, 100 per cent reserve replacement rates and moderate finding and development costs. " In fact Mr Langanger has no soothing words for investors in OMV or any other IOC. Perhaps that is why he submitted a paper and then nonetheless ended up sending a rather charming deputy who gave a far more humorous, less pessimistic point of view at the panel discussion.
