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By Liz Hampton
HOUSTON, March 2 (Reuters) – Top energy executives and
officials from around the world will descend on Houston next
week just as the political fallout from Russia’s invasion of
Ukraine a year ago continues to distort global oil supply lines
and put long-term energy security front of mind for governments.
Oil company chiefs and ministers will make their case for
investment in all forms of energy – fossil fuels and renewables
– to meet rising demand and at the same time accelerate the move
toward the low-carbon industry of the future.
A record 7,000 people have signed up for the week-long
CERAWeek discussion of fossil fuels, clean energy, advanced
energy storage.
The war in Ukraine sparked a rally in crude oil and fuel
prices that led to record industry profits, prompting the U.S.
government and others to accuse Big Oil of profiteering and for
Britain and some other governments to impose windfall taxes on
energy companies.
Big Oil executives and U.S. government officials will likely
trade blows publicly again as they did at last year’s event.
While the U.S. and many Western governments continue to call on
oil firms to pump more, executives at top oil firms say they
have a duty to their shareholders to maximize returns for
staying invested in an industry which faces an uncertain
long-term future.
This year’s presenters also reflect ongoing clashes over
supply and demand between the Organization of the Petroleum
Exporting Countries, Europe and the U.S. that have led to some
visible vacancies.
Instead, Shell’s
Wael Sawan will join BP’s
Corp’s
TotalEnergies’
“We will get a sense of how companies’ strategies have been
changed by the events of the last year,” said Dan Yergin, the
Pulitzer Prize-winning author and vice chairman of conference
organizer S&P Global, in an interview.
BP’s Looney will share the stage with Hertz car-rental CEO
Stephen Scherr, whose firm has become an energy transition
champion with plans to buy tens of thousands of electric
vehicles from General Motors
“The industry is on board with the energy transition, ESG
and decarbonization, but there is a recognition that we are
going to need hydrocarbons from an energy reliability and
security standpoint,” Pat Jelinek, EY Americas oil and gas
leader, said of the return to prominence of Big Oil executives.
WHERE’S OPEC AND SHALE?
Speakers include oil ministers from Africa and Asia, where
balancing energy security and the threat of climate change are
paramount. There are no officials from Russia, which in the past
has sent its energy minister, and much fewer OPEC participants.
Noticeably absent from the agenda are oil ministers from
Saudi Arabia, Iraq, Kuwait and the United Arab Emirates. OPEC’s
output cut of 2 million barrels per day (bpd) last November led
to a bitter row with the U.S., as President Joe Biden was
fighting mid-term elections and high gasoline prices – issues
that nearly cost him a majority in both houses.
Top shale executives also will get less of the limelight.
U.S. shale also battled with the Biden administration over oil
drilling restrictions and a lower investment in new output.
Shale has become less of a factor in global markets, and
tensions between OPEC and shale are less intense than they used
to be.
Executives from shale bigs Hess Corp
with the late OPEC Secretary General Mohammad Barkindo. Barkindo
received a gift bottle of “Genuine Barnett Shale,” the oilfield
that launched the shale revolution.
U.S. shale also has been overshadowed by Big Oil as the
companies grapple with slower gains and tight-fisted investors.
Total U.S. oil production is forecast to rise modestly this year
– less than 600,000 bpd – compared with a jump of about 2
million-bpd in 2018.
“U.S. exploration and production companies have moderated
growth,” said Andy Hendricks, CEO of U.S. driller Patterson-UTI,
leaving OPEC “in charge of oil prices.”
ENERGY INNOVATION
While geopolitical strife continues elsewhere, next week’s
get-together will feature technological innovation in oil and
liquefied natural gas (LNG) alongside, electric power, hydrogen
and carbon capture.
“There’s never been such a focus on innovation of
technologies across the energy industries,” said S&P’s Yergin.
Some 225 start-ups will participate, a 60% increase from a
last year, many of which got a shot in the arm from Biden’s
Inflation Reduction Act, which provides tax credits and
incentives for low-carbon and clean energy technology.
U.S. Energy Secretary Jennifer Granholm and White House
clean energy advisor John Podesta will lay out implementation of
the Inflation Reduction Act, said S&P Global’s Yergin.
“The amount of renewables that we’re going to have to build
over the next decade is enormous, and I don’t think everybody
has really digested the scope of that,” said Andres Gluski, CEO
of energy and utility giant AES Corp
(Reporting by Liz Hampton in Denver
Editing by Marguerita Choy)
((Liz.Hampton@thomsonreuters.com; +1 832 571 8115; Reuters
Messaging: Reuters Messaging: liz.hampton.reuters@reuters.net))
Keywords: CERAWEEK ENERGY/PREVIEW (PIX)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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