G. Allen Brooks
G. Allen Brooks
G. Allen Brooks currently works as a consultant for the strategic oilfield and finance industries and is a regular contributor to The Maritime Executive magazine. Over his 40 year career in energy and investment he has served as an energy security analyst, oil service company manager, and as a member of the board of directors for multiple oilfield service companies.
Daisy-Picking
She loves me? She loves me not? She loves me? She loves me not? Usually while contemplating the answer to these questions, a daisy’s petals are being picked. The question has a binary answer – and hopefully the right one. Now if you’re into binary decisions and if it’s Mother Nature you’re talking about, the questions are more likely: Bitter cold? Extraordinary heat? Or maybe: Drought? Flooding rains? For oil industry executives, the daisy-picking exercise is about commodity prices....
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The Parable of the Boiling Frog
If you are a frog, you jump from a pot of boiling water. But if you are placed in a pot of tepid water that is gradually heated to boiling, you die. This is the parable used to explain why humans react quickly to sudden events but fail to react to slowly changing conditions until it is too late. Why should we care about boiling frogs? With energy transitions, which history shows take decades to occur, the pace of change...
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Saudi Arabia: The Sisyphus of Oil?
In Greek mythology Sisyphus was the king of Ephyra – modern-day Corinth. He was a sly and deceitful ruler who murdered travelers that came to his realm while engaging in other nefarious acts that angered Zeus, the ruler of all the gods. As punishment for his ways, Zeus consigned Sisyphus to eternally pushing a boulder uphill. Upon reaching the summit, the rock would roll downhill again and the process repeated. Though separated by centuries and 1,700 miles, events in the...
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Mixed Signals
We are rapidly approaching the midpoint of the initial term of the OPEC production cut agreed to last November. Initial reports are that the 11 member countries party to the agreement have demonstrated very strong compliance. In fact, a report by the International Energy Agency says that OPEC members collectively have reduced output by 90 percent of the 1.2 million-barrel-per-day cut. Other surveys have supported this extraordinarily high compliance figure. That is significant given that over the past three decades...
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Oil Price Blues
The recent World Petroleum Congress in Istanbul ended with an outpouring of negativism about the industry’s future. The negativism was characterized by the “lower forever oil price” outlook decreed by Dinesh Kumar Sarraf, Chairman of India’s state-run Oil & Natural Gas Corp. He and others discussed the devastation caused by the collapse of oil prices in late 2014 and the subsequent lack of progress in restoring them. The market’s optimism earlier this year that the production-cut agreement among OPEC members...
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OPEC'S Recurring Nightmare
AMERICAN SHALE HAS BECOME THE FREDDIE KRUEGER OF OPEC. On May 25 oil ministers from the Organization of Petroleum Exporting Countries (OPEC) will assemble in Vienna for the 172nd Ordinary Meeting of the 57-year-old organization. At every meeting over the past three years, they have been haunted by the organization’s version of Freddie Krueger, the horror film character from A Nightmare on Elm Street who used a glove fitted with razors to kill his victims in...
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Road to Recovery
From January/February 2017 Edition OIL PRICES FINALLY REBOUND AFTER A DECADE OF DECLINE Crude oil was the worst performing asset class over the last decade according to John Authers of the Financial Times. In 2007, investing in oil was a top investment strategy. And why not? It had just finished the previous ten-year span as the best-performing global commodity. Prices had climbed well above $100 a barrel, driven by numerous forecasts of oil scarcity and mushrooming...
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OPEC and the Elephant in the Room
As oil ministers haggle over the size of an output cut, the threat of recession looms. Saudi Arabia’s oil minister Khalid Al-Falih has signaled that his country is prepared to cooperate with other OPEC members to cap the organization’s production in order to help boost global oil prices. The conceptual framework for the agreement was established during sideline meetings at an energy conference held in Algeria in late September. It was further fleshed out during a members’ meeting and...
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Uncertainty Ahead
It’s hard to predict the energy market in a year filled with political and economic surprises. Energy demand is a function of economic health. Economic health is driven by the workings of society. Society, in turn, is shaped by culture and politics. Alas, 2016 is scrambling these relationships, leading one to conclude that quite possibly everything we thought we knew to be true about them may not be true after all. That possibility dawned on me...
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"Lower for Longer" - Again
The oil industry doesn’t want to hear these messages. Two years ago the idea that global oil prices would be “lower for longer,” espoused by various energy company CEOs, was considered unrealistic by most in the industry. After all, it had just come off a multiyear span of $100 a barrel oil prices. Drilling was up. Oil output was soaring. Profits were growing. Oil company stock prices were higher. Everyone was happy. ...
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