Saudi Arabia will call a summit of oil producers.
Leaders in the country will meet with oil producers and consumers in an effort to curb the surge in the price of oil. Leaders have said they fear the world economy will suffer if fuel costs continue to increase, The Guardian reported.
The world's biggest oil producer said recent price increases are not justified by market fundamentals, and it will work with the Organization of Petroleum Exporting Countries to guarantee adequate supplies.
OPEC, however, has continuously claimed there is enough supply and high prices are based on speculation and the weakened U.S. dollar.
The producers' meeting was announced in a statement from Saudi Information and Culture Minister Iyad Madani after a Cabinet meeting in Jeddah. Leaders did not, however, promise an increase in production requested by Western leaders including George Bush and Gordon Brown.
Saudi Arabia produces 9.4 million barrels a day and world demand is 85 million barrels a day.
BP claims soaring oil prices and instability are being caused by a lack of supply.
The era of cheap oil is over and fuel subsidies in a high price environment are not sustainable, said Tony Hayward, British Petroleum chief executive.
Hayward blamed high taxes in producer countries during an oil and gas conference in Kuala Lumpur, the Malaysia Star reported.
"The taxes governments take from the oil and gas industry have continued to increase across the world. I believe this is unsustainable and counterproductive. All it means is that you have less money to invest in new production," he said.
Hayward said BP would invest $22 billion this year in new production, upgrading refineries and investing in alternative forms of energy, an increase of nearly 15 percent on 2007. BP spent $7.5 billion in 2007 on share buybacks, $15.5 billion in 2006 and $11 billion in 2005.
Hayward said surging oil prices also have been brought about by rising demand, stemming from not just higher incomes but also a growing world population.
Anadarko Petroleum Corp. has found oil in fields off Ghana's shore.
The U.S. company announced the results of the Mahogany-2 drill stem test in the Jubilee field located on the West Cape Three Points Block off the coast of Ghana. The well flowed at a test rate of 5,200 barrels per day of oil and approximately 5.5 million cubic feet per day of natural gas.
"We are pleased with the results of the drill stem test, which validate the consortium's updated estimated gross recoverable resources of between 500 million and 1.8 billion barrels of oil," said Anadarko Chief Operating Officer Karl Kurz.
The partnership believes the well is in pressure communication with the Mahogany-1 discovery well on the same block and with the Hyedua-1 well on the Deepwater Tano Block.
Anadarko holds a 30.88 percent interest in the West Cape Three Points Block. Kosmos Energy is the block operator and holds a 30.88 percent interest. Other partners include Tullow Ghana Ltd. with a 22.9 percent interest and Sabre Oil & Gas with a 1.85 percent interest in the block. The E.O. Group, a Ghanaian oil and gas company, holds a 3.5 percent interest in the block, and the Ghana National Petroleum Corp. will be carried through the exploration and development phases with a 10 percent participating interest.
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Closing oil prices, June 10, 3 p.m. London
Brent crude oil: $136.00
West Texas Intermediate crude oil: $137.20
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(e-mail: [email protected])
