U.S. construction and fracking major Halliburton believes the oil market crash that has lasted three years will cause oil prices to spike by the year 2020, according to World Oil.
The oil industry has lost $2 trillion in investments due to chronically low prices, said Mark Richard senior Vice President for global business development at the World Petroleum Conference in Istanbul on Wednesday.
“Sooner or later, the market is going to catch up," Richard said. "You’ll see some kind of spike in the price of oil. Maybe somewhere around 2020-2021, but it’s got to catch up sooner or later."
Production cuts by the Organization of Petroleum Exporting Countries (OPEC) had caused a rise in oil prices back in January, but new production from Nigeria, Libya, and the United States have erased all gains from the brief bear market.
“All of our major clients are working to bring the total cost down internationally," he said. "It depends how quickly we can get to those price points and how quickly our customers are able to see that their investment is going to be solid for the long term."
Halliburton Company is in advanced talks to buy Tulsa-based Summit ESP, an oilfield equipment provider backed by Oklahoma’s oil and banking billionaire George Kaiser, Reuters reported in late June, citing sources familiar with the negotiations.
Halliburton is seeking to boost its artificial lifts business after its failed plans last year to merge with Baker Hughes, and stalled plans to acquire a similar Russian company.
Talk of the Halliburton-Summit ESP deal came just weeks after the Department of Justice (DOJ) had given the go-ahead to a proposed merger between GE’s oil and gas business division and Baker Hughes that would create an oilfield service company bigger than Halliburton, second only to Schlumberger.
By Zainab Calcuttawala for Oilprice.com
