[VIENNA] The US tight-oil boom is here to stay despite low crude prices as technological breakthroughs will allow steep reductions in costs, the head of US firm ConocoPhillips told a seminar organised by oil-producing group Opec.
"Innovations have already led to a US energy renaissance. Tight oil reservoirs can remain viable today, breakeven costs are already down by 15 to 30 per cent," said Ryan Lance, chairman and CEO of Conoco.
Oil prices crashed over the past year after Opec decided against cutting production to tackle a global glut that arose from a US shale oil boom. Opec chose instead to fight for market share, betting that a price drop would depress output in higher-cost producers such as the United States.
Mr Lance said cost reductions had been partly achieved due to cuts in service costs.
He added that breakeven costs for tight oil would likely go down another 15-20 per cent by 2020.
"So the message - unconventional production is here to stay," Mr Lance told an audience packed with Opec officials, including Saudi Arabia's influential oil minister Ali al-Naimi.
Mr Lance also said he saw world demand growth for oil recovering to 1.1 or 1.2 million barrels per day, double what it was over the past few years.
"It is hard to envision it (the oil price) going back down to the US$40s," he said.
Mr Lance's comments on unconventional oil chime with the views of other CEOs who have been speaking at the Opec seminar in the past two days.
"If prices remain at US$60, we will have to find a way to make projects profitable," the head of French oil company Total , Patrick Pouyanne, said on Wednesday.
Claudio Descalzi, chief executive of Italy's Eni, said he expected US shale oil production to seesaw with oil prices, and oil prices to seesaw with increases and drops in US production.
"If oil prices recover, shale production will go higher again. So we need to get used to a totally different dynamic," he said on Wednesday.