Simon C. Baines
Oct 5, 2022
Despite the recent boom in oil and gas prices, the industry has not been reinvesting these gains in further production, says Osler’s Simon Baines, partner, Energy, in an interview with Lexpert.
“We’re not seeing that money go back into the ground in ways that, I think, may have happened in earlier bust-and-then-boom cycles,” says Simon. “Boom times come around, [and] often times the oil and gas companies couldn’t get the money back into the ground fast enough to produce more oil and gas. We’re really not seeing that in the same way.”
In Simon’s view, capital investment has also been on the wane for several years, even before the pandemic’s demand destruction. “A lot of people, myself included, have been expecting there to be difficulties on the supply side,” he says. “I think we’re now really seeing that, and obviously exacerbated by the war in Ukraine, but I don’t think really caused by the war in Ukraine.”
“Issues around the supply side of the industry have been coming for a number of years now. And with the demand rebounding coming out of the pandemic, I think we were already going to see a tightening of markets.”
Read the full article by author Aidan Macnab published on October 5, 2022