CERAWeek Day 1 Recap

Watershed Analytics presents a complimentary news roundup of the major developments and sideline conversations from CERAWeek.

Highlights from Monday are below. Contact us for our comprehensive recap, or subscribe to get daily CERAWeek recaps sent directly to your email.

LEADING THE NEWS

Al-Jaber: “Houston, We Have A Problem.” Speaking on the first day of the CERAWeek by S&P Global annual energy conference, Special Envoy for Climate Change and COP28 President-designate Sultan Ahmed Al-Jaber called on the energy industry to take bold steps to further the global energy transition. Upstream (3/6, Xu Yihe) quotes Al-Jaber as telling industry leaders Monday, “We are way off track. We need a major course correction. …  This is a global challenge that calls for global solutions from every stakeholder acting in unity and solidarity.”

• Reuters (3/6, Stephanie Kelly and Sabrina Valle) points out that earlier Monday, “Petronas CEO Tengku Muhammad Taufik used the same "Houston" phrase in a panel discussion on the challenge of balancing the need for energy security and affordability.”
• S&P Global (3/6, Starr Spencer) notes Al-Jaber called on policymakers to “create the incentives that move the market in the right direction,” and “cited the US' recent Inflation Reduction Act as an example.”
• The Associated Press (3/7, Isabella O’Malley) indicates Al-Jaber also said “the world must cut emissions 7% each year and eliminate all releases of the greenhouse gas methane -- strong comments from an oil executive,” but he “did not directly address emissions from transportation, where most crude oil ends up.”
• Instead, S&P Global (3/6, Starr Spencer) reports, he “said that aluminum, steel, cement and other heavy industries make up 30% of global emissions and are a good place to start along the road to large-scale decarbonization.” Al-Jaber further called on “the financial community…to play a ‘much bigger role’ in capitalizing” the energy “transition, even as it has eagerly lent money in the last couple of years to developing projects proposed by not only technology providers but oil and gas producers from large publics to small startups.”

CERAWEEK SPOTLIGHT

OPEC Officials, US Energy Execs Dine On Sidelines Of CERAWeek. Reuters (3/6, Liz Hampton and Erwin Seba) reports US energy executives and leading OPEC officials met on the sidelines of CERAWeek on Monday for a private dinner, during which they “discussed concerns about a lack of spare oil production capacity.” Reuters (3/6, Liz Hampton and Ron Bousso) said in an earlier report that “the secretive dinner has been held almost annually at the CERAWeek energy conference.”

Bloomberg (3/6, Natalia Kniazhevich and Lucia Kassai) reports those at the dinner included OPEC Secretary General Haitham Al-Ghais, Occidental Petroleum CEO Vicki Hollub, Pioneer Natural Resources CEO Scott Sheffield, Devon Energy CEO Richard Muncrief, Hess CEO John Hess, and Diamondback Energy CEO Travis Stice.

Hydrogen To Be Major Topic Of Discussion At CERAWeek. Axios (3/6, Alan Neuhauser, Subscription Required) reports that as CERAWeek kicked off, “one of the hot climate tech topics is what's happening with green hydrogen.” In a Sunday interview with the Houston Chronicle (3/5, Amanda Drane), S&P Global Vice Chairman Daniel Yergin said, “There's hardly a major energy company in the world that is not looking at hydrogen in some form. And I think that there'll be a big focus.”

Just 22% Of CERAWeek Speakers Are Women. Bloomberg (3/6, Julia Fanzeres) reports, “For the second straight year, women comprise 22% of speakers at CERAWeek,” which “to some extent…reflects a persistent dearth of women leaders in the oil industry.” However, CERAWeek “has made some strides to improve gender diversity.” Five years ago, “just 15% of total speakers were female. This year will see a record number of women attendees — about 31% of delegates, according to event spokesperson Jeff Marn.”

More Than 7,000 Attending CERAWeek. KRIV-TV (TX) (3/6, Tom Zizka) previewed CERAWeek, writing that “more than 7,000 people” are attending the event, which offers “a series of conversations and ideas about how to power the future.”

BIDEN ADMINISTRATION NEWS

Kerry Praises Oil Industry, Calls For Clean Energy Cooperation. Upstream (3/7, Naomi Klinge) reports US Special Presidential Envoy for Climate John Kerry said at the CERAWeek conference Monday that he “wants the oil and gas industry to collaborate with the government's ambitions on clean energy and to re-evaluate its businesses.” Kerry also “praised the oil and gas industry for its serious technological and organizational skills, saying they should be used to manage and reduce the demand for fossil fuels.”

Argus Media (3/6, Haik Gugarats) notes that Kerry said “the biggest challenge to advancing global decarbonization goals is lack of funding.” Reuters (3/7) reports Kerry also said on Monday that “US cooperation with China on climate change was currently ‘rough,’” as “diplomatic issues that had cropped up between Washington and Beijing had taken a toll.”

Hochstein: G7 Price Caps Having Effect On Russian Oil. Reuters (3/6, Simon Webb) reports US energy envoy Amos Hochstein told the CERAWeek conference on Monday that “the price caps imposed by the G7 and allies to force Russia to sell its crude and fuel at a discount are working well.” Said Hochstein, “I think the beauty of the process is that it is working and that Russian oil and Russian products are being traded below the price cap.”

Podesta: Permitting Reform “Top Priority” For Biden. The Washington Examiner (3/6, Jeremy Beaman) reports that, addressing the CERAWeek energy conference Monday, White House adviser John Podesta “said passing energy permitting reform is a ‘top priority’ for the Biden administration as House Republicans move legislation through committee that would seek to speed up environmental reviews of energy projects.” Podesta, “charged with helping to oversee implementation with Democrats' Inflation Reduction Act, expressed frustration that lawmakers were unable to pass [permitting] measures during the last Congress.”

State Official: US Wants Hike In Oil Production. Agence France Presse (3/7) reports Jose Fernandez, US Undersecretary of State for Economic Affairs, Energy and the Environment, said on the sidelines of the CERAWeek energy conference that the US “wants to see a hike in oil production, including from OPEC countries.” Said Fernandez, “As world economies recover, we’ll see more consumption. And therefore, we’d like to see supply meet demand.”

Petronas, Repsol CEOs Say IRA Will Boost Foreign Investment. Reuters (3/6, Gary McWilliams) reports Petronas CEO Tengku Muhammad Taufik told the CERAWeek energy conference Monday that the Inflation Reduction Act's “provisions to spur development of infrastructure to mitigate climate change will attract investment from abroad.” Taufik said, “The IRA will have the effect of really attracting capital back to the U.S. for the reasons and the results that it sort of needs.”

Chevron Chief Waiting For Regulations Before Assessing IRA. Upstream (3/7, Naomi Klinge), meanwhile, indicates “Chevron chief executive Mike Wirth remains hesitant on how the US Inflation Reduction Act (IRA) will influence the energy industry, preferring to wait until regulations are set to gauge support for the energy transition.” At CERAWeek, Wirth “said the legislation showed promise in its efforts to drive down costs of new technologies, but that it is difficult to know exactly how the legislation will be rolled out.”

Willow Project

Sullivan Touts Willow Project At CERAWeek. S&P Global (3/6, Starr Spencer) reports US Sen. Dan Sullivan (R-AK) said at the CERAWeek energy conference that “ConocoPhillips' Willow development in Alaska has ‘everything the Biden Administration says it wants’ for a favorable hydrocarbons project, but the White House appears to be signaling it may require one final provision that could derail the project.” Dow Jones (3/6, Benoit Morenne) quotes Sullivan as saying, “This should be the project that Joe Biden…should want to approve.”

Podesta: Decision Coming “Pretty Soon.” Bloomberg (3/6) reported that White House’s top clean energy adviser John Podesta Monday “brushed aside oil-industry suggestions that the Biden administration’s decision on ConocoPhillips’ proposed Willow project in Alaska is a litmus test of its willingness to support substantial oil and gas development in the US.” Podesta said “the administration is dealing with ‘a specific project and the question of whether it will be permitted, which rests with the secretary of interior.’” He added “a decision will come ‘pretty soon.’”

RUSSIA/UKRAINE IMPACT

Chevron’s Wirth: Ukraine War Fundamentally Changed Global Natural Gas Market. Reuters (3/6) reports Chevron CEO Mike Wirth said at CERAWeek that the Russian invasion of Ukraine has changed the global natural gas market “more fundamentally changed for the long term” than it has the oil market. Wirth said Europe “has turned away from dependence on Russian gas supplies and has no intention of changing that in the future.”

News In France (3/7) reports Wirth also warned that “the price ceiling imposed by the West on Russian oil products has created a large number of difficulties for the operation of energy markets.” Natural Gas Intelligence (3/6, Carolyn Davis) says Wirth was the opening speaker at CERAWeek. Hart Energy (3/7, Chris Mathews, Subscription Required) also covers Wirth’s remarks.

Gunvor CEO: Market Has Stabilized Because “Worst Fears” About Ukraine War “Didn’t Come True.” Reuters (3/6, Stephanie Kelly) reports Gunvor CEO Torbjorn Tornqvist, speaking at CERAWeek, said the global oil market has stabilized “because the worst fears about shortages of crude, gas and fuel” in the wake of the Russian invasion of Ukraine did not come to pass. Tornqvist said, “The worst fears about winter, gas or diesel shortage, didn't come true.”

US-BASED INDUSTRY

Chevron, Talos Have Tripled Size Of Proposed Bayou Bend Hub. Reuters (3/6, Sabrina Valle) reports Chevron and Talos Energy representatives said Monday on the sidelines of CERAWeek that they have tripled the size of the proposed Bayou Bend carbon capture and storage hub on the Texas Gulf Coast.

Baker Hughes CEO Sees “Need For More Oil.” Bloomberg (3/6) reports that oil field-services provider Baker Hughes “is gearing up for years of expansion to make up for underinvestment from clients.” In an interview at CERAWeek, CEO Lorenzo Simonelli said, “We do see a hunger and a need for more oil.”

Exxon Mobil Seeks Approval To Sell Nigerian Shallow Water Operations. Reuters (3/6, Sabrina Valle) reports Exxon Mobil Global Upstream President Liam Mallon said in advance of CERAWeek that the company “hopes to get Nigerian government approval to allow the stalled sale of its shallow water oil production operations” there.

Grindal Says Cheniere Will Ship More To Asia Than Europe This Year. Reuters (3/6, Marianna Parraga) reports Cheniere COO Corey Grindal said at CERAWeek that the company expects to ship more liquefied natural gas to Asia this year “after European customers took the lion's share of its 2022 cargoes.” About 70% of Cheniere’s 2022 shipments were delivered to Europe.

Pioneer’s Sheffield Expects Permian Basin Production To “Peak In Five To Six Years.” Bloomberg (3/6, Immanual John Milton) reports Pioneer CEO Scott Sheffield said in an interview at CERAWeek that Permian Basin oil production “will peak in five to six years.”

Siemens Compressors To Be Used At Occidental DAC Plant. Hydrocarbon Processing (3/6) reports Siemens CEO Christian Bruch and Occidental CEO Vicki Hollub announced at CERAWeek that Siemens compressors “will be used at Occidental’s first large-scale Direct Air Capture (DAC) plant in Texas’ Permian Basin developed by 1PointFive, a subsidiary of Occidental.”

Occidental CEO Sees Future For Nuclear. Houston Chronicle (3/6, Amanda Drane) says Occidental “has taken one of the more aggressive approaches to the energy transition, thrusting down a path that would transform it into a carbon management company.” In a moderated talk at CERAWeek, Occidental CEO Vicki Hollub said, “I think nuclear is going to have to be a key part of the energy equation going forward. It's just a matter of which of the nuclear options are going to be most suitable.”

INTERNATIONALLY BASED INDUSTRY

Ebel Says Enbridge Will Supply More Gulf Coast LNG Export Facilities. Reuters (3/6, Stephanie Kelly) reports Enbridge CEO Greg Ebel said on the sidelines of CERAWeek that it is “expected to supply two to three more liquefied natural gas export facilities throughout the U.S. Gulf Coast ‘before too long.’”

Cenovus, Suncor CEOs Say Canada Has Fallen Behind US. Chris Varcoe writes in his Calgary Herald (3/6) energy column, “The heads of two of the country’s largest oilsands producers say Canada has fallen behind” the US. Cenovus Energy CEO Alex Pourbaix and Suncor Energy interim CEO Kris Smith, who are both appearing at CERAWeek this week, said Canada “trails the new U.S. Inflation Reduction Act (IRA) in offering incentives to major decarbonization initiatives, such as for carbon capture, utilization and storage (CCUS) projects.”

Petrobras, Equinor Sign Offshore Wind Project Assessment Agreement. Reuters (3/6, Sabrina Valle) reports Brazil's Petrobras and Norwegian energy provider Equinor have “signed an agreement to evaluate development of seven wind projects offshore Brazil.” CEO Jean Paul Prates said at CERAWeek that the proposed projects “would deliver a combined capacity of 14.5 gigawatts of power.”

Guyana VP Discusses Upcoming Auction. Reuters (3/6, Sabrina Valle and Marianna Parraga) reports Guyana Vice President Bharrat Jagdeo spoke at CERAWeek on Monday about the country’s upcoming auction of 14 offshore oil exploration blocks. Jagdeo told Reuters, “We see this as big, transformative for our people. We are in a mad rush to get this done before net-zero comes.”