Frackers, OPEC Size Each Other Up at CERAWeek Energy Confab in Texas
03 March 2018 - 1:21PM
Dow Jones News
By Christopher M. Matthews
A rapidly shifting energy landscape being reshaped by new
technologies and a revival of U.S. fossil-fuel production will
dominate the agenda as the world's leading energy executives,
government ministers and financiers gather in Houston next
week.
Thousands of energy leaders, including the heads of Royal Dutch
Shell PLC, BP PLC and Saudi Arabian Oil Co., will descend on Texas
starting Monday for CERAWeek, the annual conference put on by IHS
Markit Ltd. that has become a bellwether for the health of the
global energy industry.
They will be joined by many of the world's top energy policy
makers, notably OPEC Secretary General Mohammad Barkindo and
several Trump administration officials, Energy Secretary Rick Perry
and Interior Secretary Ryan Zinke.
Leaders of many other energy-related industries are also set to
speak, including the chief executives of General Motors Co. and
Siemens AG.
This year's gathering takes place amid a continuing recovery for
oil prices, which passed $70 a barrel earlier this year for the
first time since 2014, and have been over $60 for most of the
year.
But concerns linger about whether the oil market is truly
overcoming a glut as U.S. production continues to surge, thanks to
shale drilling. For the second year running, Mr. Barkindo and U.S.
shale producers are set to meet privately for dinner as they seek
to learn about one another.
"The exporters, OPEC and non-OPEC, are trying to understand how
this different kind of U.S. oil industry works," said Daniel
Yergin, vice chairman of energy research at IHS Markit. "They're
there to learn, because it's changed the nature of the oil
market."
If the U.S. surges past Saudi Arabia to become the world's
second-biggest oil producer behind Russia, as some forecasters
predict, it could signal a fundamental change in a global pecking
order that has been a basis for international energy policy for
decades.
"The role of the U.S. in global energy markets has changed more
dramatically than the public realizes," said Mr. Yergin, who serves
as the event's master of ceremonies, co-hosting dozens of sessions
on oil, natural gas, electric power and geopolitics. "It's a new
form of influence for the United States in the world."
The conference will be packed with ministers from large oil and
gas producers, including Norway, Kuwait, Nigeria, Canada, Mexico
and the United Arab Emirates, as well as executives from Gazprom,
Russia's largest gas company, and Saudi Aramco, which is in the
middle of planning for an initial public offering.
A likely topic of discussion: whether top U.S. shale companies
will abide by investor demands that they instill capital discipline
and emphasize returns, or succumb to the allure of even more
drilling at current prices. The heads of many top U.S. producers
are set to speak, including Occidental Petroleum Corp., XTO Energy
Inc., Pioneer Natural Resources Co. and ConocoPhillips.
Another major topic: how huge reserves of U.S. natural gas are
also upending energy markets. The U.S. became a net exporter of
natural gas in 2017, according to the U.S. Energy Information
Administration, a trend fueled by exports to South America and
Asia. Top executives from the companies at the heart of the gas
export boom -- Cheniere Energy Inc., Freeport LNG Development LP,
Tellurian Inc. and Venture Global LNG -- will discuss their
plans.
A host of electric-power executives are set to speak as the
utility industry experiences rapid changes, with coal and nuclear
generation losing ground to gas, solar and wind. They include the
heads of Duke Energy Corp., PG&E Corp., Exelon Corp. and Edison
International.
The conference will also examine longer-term questions looming
over the industry, including how digital technologies are fast
changing the way companies produce oil and gas, and the differing
outlooks for when electric vehicles and renewable energy will start
to take a serious bite out of demand for oil and gas.
--Bradley Olson contributed to this article.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com
(END) Dow Jones Newswires
March 02, 2018 21:06 ET (02:06 GMT)
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