Frackers, OPEC Size Each Other Up at CERAWeek Energy Confab in Texas
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 email@example.com
(END) Dow Jones Newswires
March 02, 2018 21:06 ET (02:06 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.