CERAWeek Day 2 Recap
Watershed Analytics presents a complimentary news roundup of the major developments and sideline conversations from CERAWeek.
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LEADING THE NEWS
OPEC’s Al Ghais Sees “Two Markets” For Oil Demand. Bloomberg (3/7, Lucia Kassai and Grant Smith) reports OPEC Secretary-General Haitham Al Ghais said at CERAWeek on Tuesday that “slowing oil demand in Europe and the US are posing a concern for the global market, even as Asia experiences ‘phenomenal’ growth.” Al Ghais said, “We see a divided market — almost like two markets.”
- The Street (3/7, Ellen Chang) reports Al Ghais said the oil and gas industry “needs a large amount of investment in order to meet growing global demand,” and said “renewable power is not sufficient” to meet demand. Said Al Ghais: “There is no imaginable way renewables can do this.”
- Upstream Online (3/7, Xu Yihe, Subscription Required) reports Al Ghais said that “plenty of oil remains underground that should still be produced, while using best practices and technology to extract it responsibly.”
Al Ghais Not Concerned About Redirection Of Russian Crude To Asia. The UAE-based The National (3/7, John Benny) reports Al Ghais also said “he was not concerned about the redirection of Russian crude oil to Asia.” Reuters (3/7, Stephanie Kelly) quotes Al Ghais: “This is typical where we have redirection in flows from the east to the west or west to the east.”
Hydrogen Major Topic Of Discussion At CERAWeek. FreightWaves (3/7, John Kingston) reports, “As the topic of hydrogen came up yet again during one of the larger sessions on the first day of CERAWeek, a panelist quipped that the conference perhaps should be renamed Hydrogen Week.” Hydrogen’s “central role…at the CERAWeek meeting stands in sharp contrast to its past structure, when Day One was about oil, Day Two was about natural gas and Day Three was about electricity.” On Monday, “more than a dozen presentations had hydrogen or ammonia…in their titles.”
- Interviewed on CNBC (3/7, Brian Sullivan), S&P Global Vice Chairman Dan Yergin noted hydrogen’s major-issue status at the “largest” ever CERAWeek, indicating that “technology” and “innovation” — as well as “geopolitics” — would dominate the conference. Houston Public Media (3/7, Celeste Schurman) indicates that “this year, the overarching theme is the energy ‘trilemma’ — sustainability, affordability and security — which brings into scope much larger issues facing the energy industry.”
Bechtel CEO: LNG Industry Model For Energy Infrastructure Investments. Natural Gas Intelligence (3/7, Jacob Dick) reports that “as energy buyers and governments across the world try to balance climate goals and energy security during a period of high volatility, Bechtel Corp. CEO Brendan Bechtel said the growth of the LNG industry should serve as a model for how energy infrastructure investments can tackle multiple challenges at once.” Bechtel said at a CERAWeek panel, “We need to learn your technology to develop the right expertise to be ready when you’re ready to hit the go button.”
Kuwait’s Al Sabah: Global Market In Balance Though First Half Of 2023. Reuters (3/7, Stephanie Kelly) reports “Kuwait Petroleum Corporation sees the global oil market in balance through at least the first half of this year, its chief executive said on Tuesday.” Nawaf Al Sabah said “demand from China is seeing a sustainable increase,” and “Kuwait has not lost any market share in China from discounted Russian oil barrels.”
- The comments were made at a CERAWeek discussion on the role of national oil companies, Upstream (3/7, Xu Yihe, Subscription Required) reports, noting they “account for 50% of global oil and gas production.”
- Al Sabah also addressed plans for second phase units for Kuwait's Al Zour refinery. Argus Media (3/7, Ieva Paldaviciute and Haik Gugarats) indicates Al Sabah said “the timing of bringing al-Zour online means that ‘an opportunity opened up for us to supply mid distillates, low sulfurfuel oil and diesel jet fuel to a market that nobody anticipated would need so much.’”
Bahra in Official Addresses Energy Transition. Hydrocarbon Processing (3/7) reports “his Highness Shaikh Nasser bin Hamad Al Khalifa,” Chairman of The Oil and Gas Holding Company B.S.C., “addressed the world’s energy leaders in a keynote speech at CERAWeek 2023 by S&P Global where he spoke about the Kingdom of Bahrain’s energy transition and the future of global energy.” Khalifa “highlighted the importance of implementing changes that ensure that guiding principles of sustainability, affordability, and security of supply are upheld.”
Petrobras Announces GasLub Plant Will Come Online In 2024. Argus Media (3/7, Carla Bass) reports “Brazil's state-controlled Petrobras aims to bring its delayed GasLub natural gas-processing plant online early in 2024, adding an initial 9mn m³/d of natural gas supply to the domestic market, head of exploration and production Fernando Borges said.” Borges said at the CERAWeek conference, “Petrobras plans to double the amount of gas available to the market in the next five years.”
ACP Chief: Investors In “Wait-And-See” Mode As Government Settles In. Hart Energy (3/7, Pietro Pitts, Subscription Required) reports “investors interested in Colombia’s energy sector are in a wait-and-see mode as the new government continues to settle in, Colombian Petroleum Association (ACP) Executive President Francisco José Lloreda Mera told Hart Energy during CERAWeek by S&P Global.” Said Lloreda, “Certain members of the government understand and acknowledge the importance of oil and gas not only from an energy security point of view but from a fiscal and financial point of view.”
Guyana’s VP: “Gas To Energy Program” To Start Producing By 2024. Natural Gas Intelligence (3/7, Christopher Lenton) reports “Guyana is fast becoming a regional oil powerhouse, and the country’s vice president Bharrat Jagdeo thinks natural gas is the next step for the small nation at the northern tip of South America.” Speaking at CERAWeek, Jagdeo said, “The gas to energy program is going to start producing by 2024.”
- Bloomberg (3/7) indicates, meanwhile, that Jagdeo also said “the country’s first auction is expected to take place by the end of May after being delayed by a few weeks as the government finalizes contract terms and legislation that ensure it secures a larger share of proceeds.”
Calgary Mayor Attending CERAWeek. The Global News (Canada) (3/7, Adam Toy) reports the mayor of Calgary, Jyoti Gondek, “is attending CERA Week and the World Energy Cities Partnership (WECP) in Houston, and then South by Southwest (SXSW) in Austin, Texas.” Gondek “noted she is planning on meeting with representatives of other orders of Canadian governments and officials from around the world.”
Activist Claims To Have Been “Banned” From CERAWeek. In a digest of developments at CERAWeek, the Houston Chronicle (3/7, Amanda Drane) reports Svitlana Romanko, “founder of Razom We Stand, an organization calling for an end to investment in Russian oil and gas, said in a Twitter post that she had been ‘banned’” from the CERAWeek conference. The Chronicle adds that a spokesman for S&P Global said, “We carefully assess security concerns and may deny entry to individuals or entities who have disrupted prior events.”
BIDEN ADMINISTRATION NEWS
US Policy “Carrots,” IRA Garnering Praise At CERAWeek. Energy Intelligence (3/7, Casey Merriman, Caroline Evans and Luke Johnson) reports “industry executives are putting the spotlight on the pitfalls of policy ‘sticks’ and praising the merits of policy ‘carrots’ as government intervention in global energy markets continues at an unprecedented pace.” Executives are “lauding the accelerating impact that fiscal incentive-based policies,” with the IRA garnering “outsized praise — and the envy of non-US based companies.”
Bloomberg (3/7) indicates “energy executives from Canada and Europe have already expressed their admiration, even envy, for the US’s Inflation Reduction Act. Now add Australia to the list.” Meg O’Neill, chief executive officer of Perth-based Woodside Energy Group Ltd., said in an interview, “The IRA is a game changer, in some ways it takes the US to the front of the race for these sorts of investments.”
Exxon Boosting US Investment, Reevaluating European Role. Reuters (3/7, Sabrina Valle) reports Exxon Mobil Chief Executive Darren Woods said yesterday at CERAWeek that the company “is reviewing its role in Europe in view of new windfall profits taxes as it increasingly invests more in the US.” Said Woods, “We certainly step back and reevaluate what we are doing in Europe.”
- Bloomberg (3/7) notes Woods said the EU tax “would wipe out years of profit from recent refining investments, and means Exxon plans to pull back future spending on the continent in favor of the US.”
ConocoPhillips CEO Calls For Permitting Reform, Willow Approval. In remarks to the CERAWeek conference, Reuters (3/7, Gary McWilliams), ConocoPhillips CEO Ryan Lance said “the goals of the administration's Inflation Reduction Act will be ‘procedurally impossible’ without streamlined permitting for lower carbon energy infrastructure.”
- The Washington Examiner (3/7, Jeremy Beaman), meanwhile, notes that Lance also “said the company's plans for developing Willow mesh with Biden's repeated calls targeted specifically at large integrated energy companies for more oil production to bring down prices.” Said Lance, “It's exactly what this administration has been asking our industry to do, lean in, produce more [oil].”
- The Houston Business Journal (3/7, Chandler France) quotes Lance as saying, “This isn’t just an Alaska problem or a US problem. It’s a global problem. … If (the oil) doesn’t come from Alaska, it’s going to come from someplace else around the world that has less environmental standards.”
Officials, Industry At Odds Over Energy Transition’s Next Steps. “Six months after the US passed a massive spending package meant to underpin the energy transition,” says Energy Intelligence (3/7, Emily Meredith), “policymakers and companies alike are looking for more” – but “what ‘more’ means… depends on who is speaking.” While “for government officials, it means more action from the fossil fuel industry to curb its own emissions,” for industry “a more favorable regulatory environment is needed. In the US, that translates specifically to permitting reform.”
Oxy CEO Says Company Sticking To Capital Spending Plan. CNBC (3/7, Eric Rosenbaum) notes “Oxy CEO Vicki Hollub oversaw the No. 1-performing stock in the S&P 500 in 2022,” adding that though “the White House has pressured oil companies to produce more,” Hollub “says its capital spending plan will remain as focused on buybacks and dividends as oil production.”
State Official: No Plans For Further Easing Of Venezuela Sanctions. Reuters (3/7, Marianna Parraga) reports that in an interview at the CERAWeek conference, Under Secretary of State for Economic Growth, Energy and the Environment Jose Fernandez said “the U.S. government is not planning a systematic easing of sanctions on Venezuela after an initial round allowed partners of state-run oil firm PDVSA to resume taking oil for past debts.” Said Fernandez, “I can categorically say that we don't have any plans to liberalize further on Venezuela.”
DOE To Overhaul Clean Energy Sector Loans. Reuters (3/7, Ernest Scheyder and Richard Valdmanis) reports that in an interview “on the sidelines of the CERAWeek energy conference in Houston,” Jigar Shah, head of the Energy Department's Loan Programs Office, said “less than a third of companies applying to a U.S. green energy loan program are able to navigate a complex credit review process,” adding that the agency “aims to speed development of the clean energy sector with loans to automakers, miners, recyclers and others.”
Oil And Gas Execs Highlight Ongoing Risk To Energy Markets. Reuters (3/7, Stephanie Kelly and Erwin Seba) reports that “executives and officials from some of the world's top oil and gas companies” said on Tuesday at the CERAWeek conference that “energy markets are balanced now, but could easily be disrupted due to tight spare production capacity and supply uncertainties related to Russia's war in Ukraine.” The story features comments to that effect by Anders Opedal of Equinor, Michael LaMotte, senior managing director of investment firm Guggenheim Partners, and the chief executives from Gunvor and Kuwait Petroleum Corp, among others.
- Energy Intelligence (3/7, Luke Johnson) reports, meanwhile, “the CEOs of two of the region's largest energy companies,” Equinor’s Opedal and Eni’s Claudio Descalzi, said on Tuesday” at CERAWeek that “the war in Ukraine has forced Europe to prioritize flexibility and diversity of energy supplies, given the tight near-term outlook for natural gas.” Reuters (3/7) quotes Descalzi as saying, “This next year, and also in 2024 and 2025, will be more difficult because last year until July we relied on about 80% of the Russian gas."
Kazakhstan Energy Minister Looks To Diversify Oil Routes. Bloomberg (3/7) reports that at CERAWeek, Kazakhstan Energy Minister Bolat Akchulakov said his country’s “‘number one problem’…is how to diversify its oil routes so that the nation isn’t dependent on Russia to export its crude.” Akchulakov “said Kazakhstan is planning a new pipeline that would take its crude to the Caspian Sea for export. But developing such a project could take five years and would also require a new fleet of oil tankers.”
ConocoPhillips CEO Expects “Plateau” In US Crude Production. Bloomberg (3/7, Devika Krishna Kumar and Mitchell Ferman) says major US oil producers are warning that shale oil production “appears likely to top out by the end of the decade.” ConocoPhillips CEO Ryan Lance said at a CERAWeek panel discussion, “You see the plateau on the horizon.” Lance predicted that “once US crude production peaks around 2030, it’ll plateau for a time before commencing a decline.”
Aerodyne, EDF Collaborate On Hydrogen Analyzer. Hydrogen Central (3/8) writes that Aerodyne Research and the Environmental Defense Fund are collaborating on new technology to measure hydrogen leaks “and other releases with much greater sensitivity than currently possible.” They presented a new hydrogen analyzer at CERAWeek, “where surging worldwide investment in hydrogen as a climate-friendly energy alternative is a central topic.”
Amogy Announced Ammonia-Powered Tugboat At CERAWeek. Hydrogen Central (3/8) runs a news release from Amogy on its announcement at CERAWeek that it has produced its first ammonia-powered tugboat. Amogy said that “getting the first ammonia-powered vessel on the water signals a huge milestone in the journey to zero-emissions shipping.”
Woods Says ExxonMobil Has No Emissions Reduction Target. Argus Media (3/7, Jack Kaskey) reports ExxonMobil CEO Darren Woods said at CERAWeek that the company “has no target for reducing carbon emissions from the use of its products because adopting one would increase global greenhouse gas emissions.” He argued that if Exxon produced less natural gas, “someone else would produce more coal, which would increase global carbon emissions.”
- Natural Gas Intelligence (3/7, Carolyn Davis) reports Woods also said carbon capture and storage “may be one way to successfully sequester carbon dioxide (CO2) emissions from fossil fuel production.”
BP’s Looney Sees Falling Fuel Demand As Vehicles Become More Efficient. Reuters (3/7) reports BP’s Bernard Looney said at CERAWeek that “fuel efficiency in new light vehicles is having a bigger impact on fuel demand than rising sales of electric vehicles.” He predicted that fuel demand “could fall by 5 million to 10 million barrels per day by 2040.”
Woodside Energy Moving Ahead On Trion Offshore Oil Project. Reuters (3/7, Marianna Parraga and Ron Bousso), “Australia's Woodside Energy is on track to make a final investment decision this year on the Trion offshore oil project” in the Gulf of Mexico. Woodside CEO Meg O'Neill said in an interview on the sidelines of CERAWeek, “We are very excited about Trion.”
Carlyle Group’s Goyal Touts Green Ammonia. Bloomberg (3/7, Alix Steel and David Wethe) reports Carlyle Group investment chief Pooja Goyal touted green ammonia in an interview at CERAWeek. Goyal said, “Investing in renewables alone was probably energy transition 1.0. At this point in time, you really need to widen the aperture to look beyond renewables.”
CEO Says Trafigura Carrying Out “Major Internal Audit” Following Alleged Fraud. Bloomberg (3/7, Jack Farchy and Alix Steel) reports Trafigura Group CEO Jeremy Weir told Bloomberg in an interview at CERAWeek that the company “is carrying out a ‘major internal audit’ after being hit by an alleged nickel fraud.” In his “first public comments on the subject,” Weir “emphasized that the alleged fraud was limited to a particular line of Trafigura’s business” and had found no internal involvement in the fraud.
NNPC Eyes 2024 IPO. Reuters (3/7, David French) reports that NNPC, “which recently took over the assets of Nigeria's state oil company, expects to decide on where it plans to list shortly,” with an IPO possible in 2024. NNPC CFO Umar Ajiya “told a panel discussion at the CERAWeek energy conference in Houston that the company's internal efforts to make itself IPO-ready should be completed by the middle of this year.”
PT Pertamina, Chevron Sign Indonesia Project Joint Study Agreement. Hydrocarbon Engineering (3/7, Bella Weetch) reports PT Pertamina and Chevron New Energies signed a joint study agreement on the sidelines of CERAWeek “examine the feasibility of carbon capture storage and carbon capture utilisation and storage” in East Kalimantan, Indonesia.