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BP's new projections show emissions won't go down in 20 years-VII: Low cost suppliers will fight for market share
Jan 30: The abundance of oil resources combined with the prospect of slowing oil demand may prompt a change in global oil supplies. In particular, low-cost producers may use their competitive advantage to increase market share.
8Although costs vary significantly within resource categories, the majority of the lowest cost resources are located in large, conventional onshore oilfields, particularly in the Middle East and Russia. This is followed by the best US tight oil plays.
8The abundance of oil resources prompts a change in behaviour, such that production from Middle East OPEC, Russia and the US increases disproportionately over the Outlook, with its share growing from 56% today to 63% in 2035.
8The extent to which global supply behaviour changes is a key source of uncertainty and depends on: (i) the cost and feasibility of low-cost producers increasing supply materially over the Outlook; (ii) the extent to which prices respond to increased supplies of low-cost oil and the implications this has for producers’ economies; and (iii) the ability of higher-cost producers to compete by varying their tax and royalty regimes.
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