DAVOS, Switzerland, Jan 26 (Reuters) - Oil major Total (TOTF.PA) believes OPEC should increase output only when it sees extra demand for oil, even if prices are approaching dangerous levels.
“There’s a danger of pricing moving up too quickly. This will hurt the global economy’s growth. $100 (a barrel) is really the upper limit, I see $80-$90 as being a fair price,” Total’s chief executive Christophe de Margerie told Reuters.
“So as a company we just want to ensure that the price of oil covers the cost of investment,” he said, adding that he believed there was enough oil available and the reason behind the rally was traders in the market. De Margerie said he was waiting for the G20 summit later this year to hear more about commodities regulations, which French President Nicolas Sarkozy is proposing to toughen.
But he said he did not expect oil and gas prices to be regulated in the same way governments are seeking to regulate food prices.
“What is more of a concern for governments is the stability in food prices. I‘m not saying oil is not a commodity, but it is a different animal and it is not the same problem,” he said.
De Margerie also said oil-rich countries should be able to avoid instability currently faced by their Arab neighbours such as Tunisia or Egypt.
“Usually producing countries are using their wealth and oil and gas revenues to help the economies and not the opposite. So I don’t think it is a source of instability as such,” he said.
He also said a recent deal between BP (BP.L) and Russia’s Rosneft (ROSN.MM) on a share swap and joint development in the Arctic was encouraging for investment in Russia. Asked if Total was working on expanding its activities in Russia and if he was planning to meet Russian Prime Minister Vladimir Putin, de Margerie said: “As soon as possible. Russia is a target where we look to invest”.
“There is not one single thought about quitting Shtokman,” he added, referring to the giant Russian Barents Sea project with Gazprom (GAZP.MM), which experts say may struggle to sell gas and stay commercial if gas prices remain low. (Writing by Dmitry Zhdannikov)