Glimpses of the 23 WPC 2021 in Houston

The 23rd World Petroleum Congress (WPC) – widely regarded as the oil and gas industry's most prestigious and high profile global event – returned to Houston, Texas, US this week. It's taking place from December 5-9, 2021. Often described as the "Olympics" of the energy business, the World Petroleum Congress has been held since 1933 when London hosted its first round. 

From 1991 onward, the event has gone on to be held every three years. After a COVID-19 enforced delay in 2020, which pushed the event forward by a year to December 2021, Houston hosted the event for a second time, having previously hosted the 12th WPC in 1987. This blogger is privileged to be here and delighted to bring you some glimpses of this prestigious event. 

The 23rd World Petroleum Congress (23 WPC) floor in Houston, Texas, US

The 1.8m sq ft George R. Brown Convention Center in downtown Houston is the venue of 23 WPC 

Exhibition floor of the 23 WPC

ExxonMobil's stand at the 23 WPC exhibition

NASA's Space Exploration Vehicle on display at the 23 WPC

Sonya Savage, Minister of Energy of Alberta, Canada (left) calls for an honest conversation on the need for oil & gas as the world transitions to a low carbon economy

Boston Dynamics' RoboDog 'Spot' vows visitors at the 23 WPC

It is all about keeping the youth interested & having viable STEM pathways to avert a talent gap crisis in the oil & gas business, as deliberated by this panel

Saudi Aramco CEO Amin Nasser (right) visits the 23 WPC exhibition floor

© Gaurav Sharma 2021. Photo © Gaurav Sharma, December 2021.

Oilholic’s photo clicks @ the 22nd WPC host city

The Oilholic is by no means a photojournalist, but akin to the last congress in Moscow, and in keeping with a tradition dating back to WPC 20 in Doha, there is no harm in pretending to be one, this time armed with a BlackBerry DTEK here in Istanbul!

The 22nd World Petroleum Congress also marked this blogger's return to Turkey and the vibrant city of Istanbul after a gap of three years. 

The massive Istanbul Congress Center (left) happens to be the Turkish venue for the Congress from July 9-13, 2017. Hope you enjoy the virtual views of the venue as well as Istanbul, as the Oilholic is enjoying them here on the ground. (Click on images to enlarge). 

© Gaurav Sharma 2017. Photos from the 22nd World Petroleum Congress, Istanbul, Turkey © Gaurav Sharma, July 2017, as captioned.

US Secretary of State Rex Tillerson at WPC

Decorations in the ICC front garden

Crooners entertain diners on opening night

IEA's Fatih Birol (centre) speaks at WPC

BP stand at WPC Exhibition

Oil supply chain model at WPC Exhibition

Istanbul 

Istanbul Modern

The Bosphorus, Istanbul

Oil tanker in the Bosphorus

Traditional dancers at WPC's Turkish night

Two WPC days, umpteen 'crude' angles

In typical fashion, two packed days have zipped by at the 22nd World Petroleum Congress in Istanbul, Turkey and the Oilholic could count at least a dozen talking points, few of which are duly noted here. 

Let's start with Total's boss Patrick Poyanne, whom this blogger has not had the pleasure of listening to since the International Petroleum Week in London.

Pouyanne told WPC delegates that Brazil's mammoth offshore deepwater fields could one fine day be "as profitable as US shale". That's providing operators and consortium partners keep a tight handle on break-even costs.

"Maybe they are long-cycle, and shale is short-cycle, but in terms of profitability, in the giant deepwater fields it is easy to make money, provided a handle is kept on the break-even," he quipped. 

Another industry captain - Shell's CEO Ben van Beurden - correctly opined that discussions over the global energy mix and the transition to a low carbon global economy should not only focus on Western perspectives.

van Beurden also said energy transition is regularly portrayed in terms that compare it to a revolution; a moment in time when everything changes. "In truth, different countries and different sectors will advance at different speeds. In truth, we are not talking about a moment in time, but of change that will take place over generations." (For IBTimes UK report, click here)

Meanwhile, murmurs in the Congress background suggest Abu Dhabi National Oil Company may beat Saudi Aramco to a mega stock floatation. The planned IPO would be of ADNOC's distribution business, which manages 460 petrol stations and accompanying convenience stores across the United Arab Emirates.

According to sources, ADNOC's expected valuation for the business is around $14bn, which if realised could net it $1.5bn to $2bn via a 10-15% equity float which many say might be on the immediate horizon. Still early days though. (Read all about it here).

Finally before one takes your leave, it seems 'Crude' history has been made, with India poised to buy its first consignment of US oil. Indian Minister Dharmendra Pradhan told the Oilholic the crude sourced is conventional, but New Delhi might consider going for shale oil too in the future. Here is one's full report for IBTimes UK. Well that's all for the moment from Istanbul folks! Keep reading, keep it crude!

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© Gaurav Sharma 2017. Photo: Front entrance garden of the Istanbul Congress Center, Turkey - venue of the 22nd World Petroleum Congress © Gaurav Sharma 2017.

Iraqi situation likely to unleash crude bull runs

Just as the OPEC conference dispersed here in Vienna, the speed with which the situation in Iraq has deteriorated has taken the market by surprise. Can't even blame Friday the 13th; the deterioration started a few days before.

There was not an Iraqi official commentator in sight when the trickle of news turned into a flood announcing the rapid advance of Sunni militants (or the Islamic State in Iraq and the Levant, an al-Qaeda breakaway) across vast swathes of the country to within touching distance of Baghdad.

The market is keeping reasonably calm for now. However, both Brent spot and futures prices did spike above US$113 per barrel at one point or another over the last 72 hours. We're already at the highest levels this far into 2014. The Oilholic has always been critical when paper traders jump to attach instant risk premium to the crude price at the slightest ripple say in Nigeria or Libya. However, this alas is something else and it matters.

For starters, Iraqi production was on a slow and painful recovery run. The trickle of inward investment had started and Kurdish controlled areas weren’t the only ones seeing a revival. This is now under threat. Secondly, a visibly deteriorating situation could draw Iran into the tussle and there are some signs of it already. Thirdly, it has emboldened Kurdish security forces to take over Kirkuk, with unhidden glee. This could dent ethnic calm there in that part of the country.

Fourthly, Iraq despite its troubles remains a key member of OPEC. Finally, if you look at a map of Iraqi oilfields, the areas now held by the insurgents would trouble most geopolitical commentators as they cover quite a few hydrocarbon prospection zones. Add it all together and what's happening in Iraq, should it continue to deteriorate, has the potential of adding at least $10 per barrel to the current price levels, and that’s just a conservative estimate.

If Iraq gets ripped apart along ethnic lines, all projections would be right out of the window and you can near double that premium to $20 and an unpredictable bull run. That tensions were high was public knowledge, that Baghdad would lose its grip in such a dramatic fashion should spook most. There is one but vexing question on a quite a few analysts’ minds – is this the end of unified Iraq? The Oilholic fears that it might well be. 

Away from this depressing saga, a couple of notes from ratings agencies to flag up. Moody's says the outlook for global independent E&P sector remains positive. It expects growth to continue over the coming 12-18 months, with no "obvious catalyst" for a slowdown.

Analyst Stuart Miller reckons unless the price of crude drops below $80 per barrel, investment is unlikely to fall materially for oil and liquids-oriented companies such as Marathon Oil, Whiting Petroleum and Kodiak Oil & Gas.

"The positive outlook reflects our view that industry EBITDA will grow in the mid- to high-single digits year over the next one to two years. Stable oil and natural gas prices will enable E&P companies to continue to invest with confidence, driving production and cash flow higher," Miller added.

However, a lack of gathering, processing and transportation infrastructure will continue to plague the industry, though to a lesser extent than in the past couple of years. The completion of infrastructure improvements will unshackle production growth rates for companies such as Continental Resources and Oasis Petroleum in the Bakken Shale, and Range Resources and Antero Resources in the Marcellus Shale, according to Moody's.

Meanwhile, Fitch Ratings said fracking could help the European Union cut its reliance on Russian Gas. Germany's reported plan to lift a ban on fracking highlights one of several ways that European countries could reduce their reliance on Russian gas, it says.

Out of the major European oil and gas companies, Fitch reckons Total could have a head start over rivals if European shale gas production ramps up, because of the experience it has gained from investment in UK shale.

The group became the first Western oil major to invest in UK shale after agreeing to take a 40% stake in two licenses earlier this year. Total would also be well positioned if France followed Germany and decided to ease restrictions on shale gas production, as its home market is thought to have some of the largest shale gas reserves in Europe.

Jeffrey Woodruff, senior director at Fitch Ratings, said, “If European countries want to cut reliance on Russian gas, other potential routes include greater use of LNG. BG will be one of the first European companies to export LNG from the US, due to its participation in three of the six projects that have been approved by the US Department of Energy to export LNG.”

All of this is well and good, but as the Oilholic noted in a Forbes post earlier this month, Europeans need to be both patient and pragmatic. The US shale bonanza took 30 years to materialise meaningfully, Europe's is likely to take longer. Speaking of shale, here is one's take on why US shale would not hurt OPEC all that much, as legislative impediments prevent the US from exporting crude oil and by default do not give it the feel of a global bonanza. That's all from Vienna folks. Next stop Moscow, for the 21st World Petroleum Congress. Keep reading, keep it 'crude'!

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© Gaurav Sharma 2014. Photo: Exploration site in Kurdistan © Genel Energy

We’re nowhere near “Peak oil” er...perhaps!

The 20th World Petroleum Congress could not have possibly gone without a discussion on the Peak Oil hypothesis. In fact, every single day of the Congress saw the topic being discussed in some way, shape or form. So the Oilholic decided to summarise it after the event had ended and before the latest OPEC meeting begins.

Discussing the supply side, starting with the hosts Qatar, Emir Sheikh Hamad bin Khalifa said his country was rising to challenge to secure supplies of oil and gas alongside co-operating with members of the energy organisations to which they were aparty, in order to realise this goal. Close on the Qatari Emir’s heels, Kuwaiti oil minister Mohammed Al-Busairi said his country’s crude production capacity is only expected increase between now and 2015 from the current level of 3 million barrels per day (bpd) to 3.5 million bpd, before rising further to 4 million bpd.

Then came the daddy of all statements from Saudi Aramco chief executive Khalid al-Falih. The top man at the world’s largest oil company by proven reserves of barrel of oil equivalent noted that, “rather than the supply scarcity which many predicted, we have adequate oil and gas supplies, due in large part to the contributions of unconventional resources.”

Rising supplies in al-Falih’s opinion will result in deflating the Peak Oil hypothesis. “In fact, we are on the cusp of what I believe will be a new renaissance for petroleum. This belief emanates from new sweeping realities that are reshaping the world of energy, especially petroleum,” he told WPC delegates.

Meanwhile, in context of the wider debate, Petrobras chief executive Jose Sergio Gabrielli, who knows a thing or two about unconventional told delegates that the speed with which the new sources of oil are entering into production has taken many people by surprise, adding to some of the short-term volatility.

“The productivity of our pre-salt offshore drilling moves is exceeding expectations,” he added. Petrobras now hopes to double its oil production by 2020 to over 6.42 billion barrels of oil equivalent. It seems a veritable who’s-who of the oil and gas business lined up in Doha to implicitly or explicitly suggest that Marion King Hubbert – the patron saint of the Peak Oil hypothesis believers – had always failed to take into account technological advancement in terms of crude prospection and recent developments have proven that to be the case.

But for all that was said and done, there is one inimitable chap who cannot possibly be outdone –Total CEO Christophe de Margerie. When asked if Peak Oil was imminent, de Margerie declared, “There will be sufficient oil and gas and energy as a whole to cover the demand. That’s all! Even using pessimistic assumptions, I cannot see how energy demand will grow less than 25% in twenty years time. Today we have roughly the oil equivalent of 260 million bpd (in total energy production), and our expectation for 2030 is 325 million bpd.”

He forecasts that fossil fuels will continue to make up 76% of the energy supply by 2050. “We have plenty of resources, the problem is how to extract the resources in an acceptable manner, being accepted by people, because today a lot of things are not acceptable,” the Total CEO quipped almost to the point of getting all worked up.

He concluded by saying that if unconventional sources of oil, including heavy oil and oil shale, are exploited, there will be sufficient oil to meet today’s consumption for up to 100 years, and for gas the rough estimate is 135 years. Or enough to make Hubbert stir in his grave.

© Gaurav Sharma 2011. Photo: Total's CEO De Margerie discusses Peak Oil at the 20th World Petroleum Congress © Gaurav Sharma 2011.

Sunset in Doha: Off from WPC to OPEC!

The 20th WPC ended yesterday in Doha and it was an amazing experience. Following the opening ceremony on Dec 4th, it was another four days of intense debates, discussions, meeting and greeting and the Oilholic has been wiser for it.

Everything from peak oil to unconventional projects was under the microscope, a deal announced here and CEO speaking there, one minister throwing-up a policy initiative to another presenting a white paper and so it went. Every oil major – NOC or IOC – offered up some newsy or debatable material and the Oilholic put them across from his perspective without attempting to be everywhere at all times and being all things to all ‘crude’ men as it was near impossible.

This blogger was also truly delighted to have moderated a Baker & McKenzie event at 20th WPC which included a seminar on NOCs, where they should invest, what they should know and where the opportunities lie. Over the course of five days, several representatives from a list of companies and firms too long to list engaged in constructive discussions – some on and some off record. Furthermore, delegates from Milwaukee to the Faroe Islands got to hear about this blog and offer their insight and suggestions which are deeply appreciated.

The Qataris aside, officials from Angola, Algeria, Brazil, Canada, China, India, Kuwait, Nigeria, Netherlands, Norway, USA, Russia, Venezuela and last but not the least the UK spared their invaluable time to discuss crude matters with the Oilholic, however briefly in some cases. One oil minister even joked that if he had time – he’d be a blogger himself!

All good things come to an end and now its time to say goodbye to Doha and head back to London, albeit briefly before the 160th meeting of OPEC ministers at the cartel’s HQ in Vienna on December 14th. There were fireworks last time between the Saudis and Iranians at OPEC HQ; let’s see what happens this time.

Ahead of the OPEC meeting, Secretary General, Abdalla Salem El-Badri took a timely swipe here in Doha at speculators.

On the penultimate day of the congress he told delegates, “Speculative activities remain an issue in the current market. This can be viewed in the respective sizes of the paper and physical markets. Since 2005, there has been a sharp increase in the number of open interest futures and options contracts. At times it has surpassed three million contracts per day, equivalent to 3 billion barrels per day. This is 35 times the size of actual world oil demand.”

El-Badri also noted that between 2009 and 2011, data has shown an almost one-to-one correlation between WTI prices and the speculative activity of the net long positions of money managers. “This is in terms of both volume and value. Let me stress, excessive speculation is detrimental to both producers and consumers and can cause prices to detach from fundamentals. It is essential to avoid distorting the essential price discovery function of the market,” he added.

Meanwhile ahead of the OPEC meeting, ratings agency Moody's has raised its 2012 and 2013 price assumptions for both WTI and Brent benchmarks. It now assumes a price of US$90 per barrel WTI crude in 2012, and US$85 per barrel in 2013, dropping to US$80 per barrel in the medium term, which falls beyond 2013. The ratings agency had previously assumed a price of US$80 per barrel for WTI in 2012 and beyond.

On Brent crude, Moody's assumes a price of US$95 in 2012, US$90 in 2013 and US$80 in the medium term - higher than the previous assumption of US$90 in 2012 and US$80 thereafter. Moody's continues to use US$60 per barrel as a stress case price for both WTI and Brent.

The move reflects the rating agency's expectations that oil prices will remain robust over the next two years, while natural gas will remain significantly oversupplied. Price assumptions represent baseline approximations – not forecasts – that Moody's uses to evaluate risk when analysing credit conditions within the oil and gas industry. And on that note, its goodbye from Doha; keep reading, keep it ‘crude’!

© Gaurav Sharma 2011. Photo: Outside the QNCC at the 20th Petroleum Congress, Doha © Gaurav Sharma 2011.

Oilholic’s photo clicks @ the 20th WPC venue

The Oilholic is by no means a photojournalist, but there is no harm in pretending to be one armed with a fully automatic Olympus FE-4020 digital camera at such an impressive venue as the Qatar National Convention Centre (QNCC) which was opened to the public for the first time for the 20th World Petroleum Congress when things began here on December 4th.

According to a QNCC spokesperson, the “sheer size (of the building pictured above left), sensational spaces spread over three levels and high-tech solutions have set new standards when it comes to hosting an event as prestigious as the Petroleum Congress.

One supposes that you can brag a little when your venue has 40,000 sq. metres of exhibition space, a conference hall facility for 4,000 delegates, 2,300-seat lyric style theatre, three additional smaller-tiered auditoriums all complete with theatre-style seating, banquet space for up to 10,000 in exhibition halls, 52 meeting rooms, ample space for pre-function logistics, exhibition foyers, lounges, hospitality suites, business centers and more importantly for fellow scribes - impressive media rooms! Phew!

Hope you enjoy the virtual views, as the Oilholic is enjoying them here on the ground.

QNCC entrance lobby

QNCC Interior: lobby level I

QNCC Exhibition floor

QNCC Exhibition floor

Total CEO Christophe de Margerie at QNCC Theatre Hall

© Gaurav Sharma 2011. Photos from the 20th World Petroleum Congress being held at the Qatar National Convention Centre, Doha, Qatar © Gaurav Sharma, Dec 2011.

Boisterous Iranians, the WPC & Crude Price

Iranians are as boisterous as ever at the 20th World Petroleum Congress displaying no signs of worries about being buffeted from all corners about their nuclear program! One even took the trouble to give the Oilholic – his “Indian brother” with British nationality – the benefit of the doubt by explaining how his country’s nuclear program was purely for peaceful purposes.

Sadly, neither the Oilholic was convinced nor as it were the market which remains jittery as the Israeli press continues its daily bombardment of a possible imminent pre-emptive air strike! End result, when last checked – ICE Brent forward month futures were at US$110.83 a barrel while the WTI traded at US$102.04! That’s the instability premium in the price for you or as the Oilholic’s new Iranian brother said, “Its courtesy corrupt paper traders who have never seen a real barrel of oil and OTC miscreants funded by Americans and Zionists”. Sigh!

Assessing the moderately bullish trend, Sucden Financial Research’s analyst Myrto Sokou notes, “As concerns about Eurozone’s debt crisis have been somewhat alleviated while ongoing tensions between Iran and the West continue to dominate the oil market. Crude oil prices continued to enjoy a strong rally, supported by the softer US dollar and growing tensions between Iran and the West.”

Sokou further notes that the Iranian foreign minister said during the weekend that a blanket ban on its oil exports would drive crude prices to US$250 a barrel. But hang on a minute; the Oilholic has been “reliably” informed it is those pesky paper traders? Drat!

Despite that, neither Sokou nor any other analyst here thinks the US$250 level is viable at the moment. Nonetheless the momentum is to the upside. Speaking of real barrels of oil, the Oilholic will get to see one again on Thursday thanks to a visit to Dukhan field courtesy of WPC and Qatar Petroleum. Meanwhile, a mega petroleum exhibition has kicked-off here today. Keep reading, keep it ‘crude’!

© Gaurav Sharma 2011. Photo I: Iran's stand at the 20th World Petroleum Congress exhibition. Photo II:  WPC Exhibition floor & entrance © Gaurav Sharma 2011.

An intensely ‘crude’ few days @WPC

In keeping with the intensity of World Petroleum Congresses of the past, the Oilholic’s first two days here have been – well – intense. The 20th WPC opened with customary aplomb on Dec 4th with an opening ceremony where feeding 5,000 delegates was a bit slow but the Qatari Philharmonic Orchestra tried its best to perk things up and make up for it.

When things began in earnest on Dec 5th – the Oilholic was spoiled for choice on what to and not to blog about and finding the time for it. Beginning with our hosts, in his inaugural address to Congress, Sheikh Hamad Bin Khalifa Al-Thani, Emir of the State of Qatar highlighted that the event was being held in the Middle East for the first time; a wrong has been right – after all the region exports bulk of the world’s oil.

Welcoming and thanking aside, the Emir made a very important point about why cooperation here among crude importers and exporters is really necessary now more than ever.

“The growing needs for oil and gas requires enormous investments by the exporting countries. The financing of these investments and securing their profitability require the most accurate information possible about the factors affecting the global demand for oil & gas to reduce the degree of risk that these investments may be subjected to,” he said.

“It is not reasonable to ask the Exporting Countries to meet the future needs for these two commodities while at the same time the consumer countries carryout unilateral activities that augment the risks facing these investments,” the Emir concludes. Well said sir – consumers need to get their act together too.

Three of the biggest consumers are here in full force, i.e. the US, Indian and Chinese delegations; the size of latter’s delegation rivals even the Qatari participation. Completing the BRICs – Brazil and Russia are here seeking partners. Lukoil is looking to expand via investments while Rosneft is seeking a greater interaction with Norway’s Statoil. Brazilian behemoth Petrobras has been flagging its wares including details about the presence of oil at a prospection well (4-BRSA-994-RJS), located in Campos Basin, in the area known as Marlin Complex.

The well, commonly known as Tucura, lies between the production fields of Voador and Marlim, at a water depth of 523 meters. Located 98 km from the shore of Rio de Janeiro State, the well is 3km from Marlin's Field and 2.3 km from the P-20 platform. The discovery was confirmed by sampling in post-salt rock in a reservoir located at a water depth of 2,694 meters.

It follows Petrobras’ confirmation on Nov. 23 about the presence of a good quality oil in well (4-BRSA-1002-SPS), in south Santos Basin, in an area known as Tiro and Sidon. Petrobras CEO José Sergio Gabrielli de Azevedo is busy outlining future plans and the company's activities in Brazil and in the world.

It seems the Brazilian major intends to invest US$225 billion between 2011 and 2015 with almost 60% of this going towards exploration and production projects.

Gabrielli highlighted Brazil as one of the largest and fastest growing markets in the world in terms of oil consumption. By way of comparison, Brazil's annual oil consumption in 2010 was up 2.1%, in contrast to a decline of 0.04% in OECD countries for the same period.

More later; keep reading, keep it crude!

© Gaurav Sharma 2011. Photo: 20th World Petroleum Congress Opening Ceremony & Dinner, Dec 4th, 2011 © Gaurav Sharma 2011.

Hello Doha! Time for kick-off at 20th WPC

The Oilholic arrived in Doha late last night before the biggest bash in the oil & gas business kicks-off in Qatar – yup its 20th World Petroleum Congress! Sadly a very late arrival at the hotel meant, the first square meal was not a local delicacy – but a visit to Dunkin’ Donuts which was just about the only place open at 12:20 am local time. Still there’ll be plenty of opportunities to savour local delights over the next five days!

As the opening ceremony takes place later this evening, there is lots to discuss already following Shell’s announcement about its withdrawal from the Syrian market in wake of EU sanctions. Other oil companies are simply bound to follow suit. Syrian officials are expected to be in attendance but it is highly doubtful that the Oilholic would gain an attendance with them.

A few more bits before things get going, one hears that Fitch Ratings expects the credit profiles of the European oil majors to remain stable in 2012 despite the risk of a possible slowdown in revenue growth combined with still ambitious investment spending programmes of around US$90 billion over the following four quarters. The agency believes sector revenue growth in 2012 will probably slow to single digits from more than 20% in 2011, according to a new research note.

The Oilholic also had the pleasure of interviewing Eduardo de Cerqueira Leite, the chairman of (currently) the world’s largest law firm by revenue – Baker & McKenzie – on behalf of Infrastructure Journal. Leite does not believe the integrated model of combining upstream, downstream and midstream businesses is dead as far as major oil companies are concerned.

“We saw Marathon Oil Corp split off its refining business and know that ConocoPhillips is planning to do the same. By spinning off R&M infrastructure assets a company can focus on producing oil and gas, particularly in the more innovative areas of offshore oil exploration and unconventional oil and gas production,” he said.

“However, we are not seeing all of the majors spin off their R&M divisions. Many still have a need for refining expertise and processing plants due to the increasing development of liquefied natural gas, natural gas liquids and high-sulphur heavy crudes. So, I wouldn't call the integrated model dead, although we are seeing changes to it,” Leite concludes.

That’s it for now. Keep reading, keep it 'crude'!

© Gaurav Sharma 2011. Photo: Doha Skyline © WPC. Logo: 20th World Petroleum Congress © WPC.