Alexei Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented on the influence of the newly elected US President Administration to the American shale oil production and the global oil market.
According to Aleksey Gromov, now potential investors will invest only in the most promising, and most importantly, short-term projects that promise a return on the horizon of three to five years. Reduction in investment means that development of the shale oil industry will slow down, and the market will begin consolidation of players.
Actually, it has already emerged during the most acute phase of the coronavirus crisis and will only intensify in the coming months and years. “Yes, there will be bankruptcies of oil shale companies, and the media will talk about them loudly,” Alexey Gromov explains. "But this does not mean that the license areas of bankrupt companies will disappear or oil production will cease there, they will simply become the property of larger players, as has happened more than once in the history of the American oil industry." Shale oil production will continue to be developed, but at a fairly moderate pace, due to the efforts of large companies that will start working only with the most promising assets.
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