CeraWeek in a spirit of optimism

CeraWeek in a spirit of optimism

Rita Lofano
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The rise in oil prices and the Trump effect are galvanizing the industry, allowing the Houston event to open auspiciously. This year's theme "The Pace of Change: Building a New Energy Future"

The 36th edition of IHS CeraWeek, the influential energy symposium involving the world's energy industry elite, opens in a spirit of optimism, this in the wake of rising oil prices and the deregulation promised by US President Donald Trump. At least 3,000 delegates from 60 countries are taking part at the Texas Conference, that opens today and runs until March 10, and is focused on ''The Pace of Change: Building a New Energy Future''. Today talks will be held by, among others, the new Exxon Mobil CEO Darren Woods, who took office last January, taking over from Rex Tillerson, who has been hired as Trump's Secretary of State. Woods' speech will be preceded by that of the Russian Energy Minister Alexander Novak. Last month Novak announced a meeting with his Saudi counterpart, Khalid Al-Falih, to be held on the sidelines of CeraWeek, and who did not rule out possible talks with US representatives. An eventuality that takes on a particular significance with the White House shaken by ''Russiagate'' involving the ties between the Trump administration and Moscow. On Tuesday the focus will be on the talks given by OPEC Secretary General Mohammad Sanusi Barkindo and by the Executive Director of IEA (International Energy Agency), Fatih Birol. Wednesday's speakers include Chevron chief executive John Watson, while Thursday will feature the Canadian Prime Minister, Justin Trudeau, who will discuss his country's energy policies. Trudeau was received by President Trump at the White House on 13 February. The Canadian and US oil and gas market are highly integrated, but now look set to move in different directions. If Trudeau intends to reconcile the development of energy resources with the implementation of international climate commitments, Trump seems geared to eliminating restrictions. ''Probably the world has not yet seen a phase like the present one in which so many forces are buffeting the energy industry'', said the Pulitzer Prize winner President of Cera (Cambridge Energy Research Associates), Daniel Yergin, master of ceremonies of the mega Houston conference. (AGI)

The OPEC effect

The summit in the Texan city, considered the world’s energy capital, follows on from the OPEC agreement, signed last November 30, when the cartel decided to cut production by 1.2 million barrels per day for the first six months of 2017, this in order to bring prices to a sustainable level - around 50 to 60 dollars a barrel, against the 30 dollars of January 2016. Eleven non-OPEC countries, including Russia and Mexico, have joined the decision to reduce quotas, agreeing to a cut of 558,000 barrels per day on a voluntary basis. By contrast, US production is increasing and IHS experts estimate that US output will be up by 500,000 barrels per day this year. How OPEC intends to respond to this increase in US production will certainly be one of the questions put to Mohammad Sanusi, Al-Falih and Novak at CeraWeek.

The Trump effect

Trump has promised to support the production of fossil fuels and build pipelines, threatening at the same time to apply tariffs to imports to the US. According to Yergin, the energy industry views some of Trump’s policies with great favour, "but there is uncertainty as to how the fiscal system will change." There is some nervousness as to what the implications will be for the North American market, which is very integrated and developed, also due to the gas exports to Mexico. "There are many doubts and worries as to how the trading system will change," said Yergin, convinced that in spite of the scepticism expressed by the White House on climate change, the world will in the long term move towards a low carbon economy.

Even last year we were present at CERAWeek 2016