CERAWeek Day III: On peak oil demand & more

As the end of day III of CERAWeek nears, for the Oilholic one panel session stood out in particular - Oil Demand: How will it look in a decade? This emotive and extremely polarizing subject turned hot late last year after the International Energy Agency issued a forecast predicting a peaking of oil demand in the 2030s. 

Naturally, OPEC blasted the IEA and said demand would continue to grow for many, many years. It also offered a bullish scenario of 116 million barrels per day in global oil demand by 2045. 

If the Oilholic were to offer his tuppence, oil will indeed continue to be a major part of the energy landscape not just for many years, but many decades. The stark reality of the matter is that no one can say for sure when oil demand will peak whether it is the IEA or OPEC. 

But kudos for the CERAWeek panelists to have at least tried. They included names familiar to the readers of this blog - Joseph McMonigle, Secretary General of International Energy Forum and Jeff Currie, a former Goldman Sachs partner and Chief Strategy Officer of Energy Pathways at Carlyle. 

Both were joined by Fred Forthuber, President of Oxy Energy Services, and Arjun Murti, Partner, Energy Macro and Policy at Veriten, and another former Goldman Sachs executive. The discussion was as lively as it gets. Here's the Oilholic's full report on the goings-on of the panel via Forbes. 

The panel followed a related quip by Shaikh Nawaf al-Sabah, CEO of Kuwait Petroleum Company, earlier in the day's proceedings. He told delegates that global energy demand will increase faster than the population growth rates through to 2050. "That means that we're going to require more energy intensity for the population in the world."

KPC's answer - why of course - increase its production capacity to 4 million bpd by 2035 from its current level of 3 million bpd. 

See, again the thing here is (as asserted earlier by yours truly), if the various forecasters can't even agree on what demand growth will be like at the end of 2024 (with the IEA predicting 1.3 million bpd and OPEC predicting 2.25 million bpd) - how can they predict for sure what the approaching horizon may look like in 2030! And on that note, it's time to say goodbye. More musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo: CERAWeek 2024 panel on - Oil Demand: How will it look in a decade? © Gaurav Sharma, March 2024. 

CERAWeek Day II: OPEC ministerial no shows & more

The Oilholic writes this blog well towards the end of the second day of CERAWeek with no sign of any OPEC ministers or the Secretary General of the producers' group. This is in stark contrast to previous years. 

However, many of the bosses of their state-owned oil and gas companies are here in fine voice, most notably, Amin Nasser, CEO of Aramco, Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, and Mele Kyari, CEO of Nigerian National Petroleum Company. 

One notable absentee among their ranks was Sultan Al Jaber - the President of COP28, UAE Special Envoy for Climate Change and Minister of Industry and Advanced Technology and Managing Director and - Group CEO of ADNOC.

However, he did appear virtually to receive the CERAWeek Leadership Award recognizing his leadership at COP28 to deliver the UAE Consensus for a global agreement on a sustainable energy future.

"I am deeply honored to accept the CERAWeek Leadership Award for the UAE Consensus," Al Jaber said upon receiving the award. "In a world too often held back by conflict, the UAE Consensus brought nations together to take a giant step forward for climate progress. 

"Multilateralism overcame geopolitics to produce an unprecedented agreement to produce a fair, orderly and responsible energy transition. In short, COP28 was a success because of its full inclusivity. Everyone had a seat at the table, everyone was invited to contribute, and everyone did contribute."

Meanwhile, Mike Wirth, CEO of Chevron, appeared at CERAWeek to express his "surprise" when ExxonMobil moved to arbitration over Guyana. Wirth also flagged his company's ongoing geothermal pilot program. Murray Auchincloss, CEO of BP, chose to big up his upstream business, while Ryan Lance, CEO of ConocoPhilips, said the wave of upstream oil and gas M&A "is not done yet". 

That wave saw $234 billion worth of deals in 2023. Additionally, and quite interestingly, Lance seemed to suggest that US oil production will likely rise from its current level of 13 million barrels per day to 14 million bpd before it plateaus. 

Well that's a wrap for day for the second day of CERAWeek. The Oilholic leaves you with a glimpse above of a scramble for the escalators for a break after the plenaries conclude. Now these ones are to the right of the ballroom exit. If only some good folks had gone far left they'd find the escalators there quite empty and reach their lunches and coffees a tad quicker :) Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo I: CERAWeek 2024 logo in Houston, US. Photo II: Crowded escalators at CERAWeek 2024 © Gaurav Sharma, March 2024. 

CERAWeek Day I: Aramco sets its stall in Houston

The Oilholic is back in town for CERAWeek 2024 and the first day has been pretty interesting. Key moments included - Aramco's CEO Amin Nasser wanting the world to ditch "fantasy" economics of phasing out oil and gas (full report for Forbes here) and Shell's CEO Wael Sawan telling delegates there is way more politicisation of oil and gas than is necessary. 

Sawan also took the opportunity to stress that Shell sees LNG as a massive opportunity. "We're heading for a multidimensional energy mix of the future. While we are stabilizing our oil business, we are actively growing our LNG business."

He added that the energy major was a "huge" believer in the LNG market's potential and sees demand rising "by 50% from current levels." 

Elsewhere, ExxonMobil CEO Darren Woods said he was not trying to scupper Chevron's acquisition of Hess. Rather his sole objective in its dispute with Chevron was to establish its own rights over Hess' lucrative assets in Guyana. 

Elsewhere, former United States Energy Secretary, and now Founder & CEO of Energy Futures Initiative Ernest Moniz summed up the most significant accomplishments of COP28. CERAWeek's video of the session here is a good one to listen to. 

Other notable speakers on Day I included Jean Paul Prates, CEO of Petrobras, Meg O'Neill, CEO of Woodside Energy, Jack Fusco, CEO of Cheniere Energy and Torbjörn Törnqvist, Chairman of Gunvor. 

As panel discussions gathered pace, CERAWeek's Agora technology and innovation program also got underway, duly visited by yours truly during the second half of the day. 

Emerging cleantech and breakthrough applications of artificial intelligence appeared to be all the rage here with loads of chatter in open forum events being held in "pods." And of course, where there are pods, there have to be hubs! 

One such hub was Agora's Climate Hub, where the Oilholic attended the "Weathering the change" session late in the day, and received some interesting perspectives on the links between climate change and extreme events, albeit with some familiar soundbites. 

And the first day of CERAWeek also saw the oil price spike to near-five month highs as Ukrainian attacks on Russian refineries spooked the markets. After hours, Brent went as high as $87 per barrel, and here's why the Oilholic believes the $85 support level has been broken (for now). Well, that's all for the moment folks, more musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo I: Amin Nasser, Chief Executive Officer of Aramco & Wael Sawan, Chief Executive Officer of  Shell. Photo II: Climate Hub at CERAWeek's Agora program © Gaurav Sharma, March 2024. 

Heading to CERAWeek with oil north of $85/bbl

Looking like another rainy morning departure from @HeathrowAirport; waiting @British_Airways South Galleries Lounge for BA195 to Houston, watching hustle & bustle of airport. Cheers to a productive week ahead. Looking forward to meeting old friends & making news ones at #CERAWeek pic.twitter.com/WKR5DdXZfd

— Gaurav Sharma (@The_Oilholic) March 17, 2024

Brent crude oil is lurking north of $85 per barrel as the Oilholic heads down south (from London) to Houston for CERAWeek 2024. The current level would make it a 4-month high. It's what two geopolitical variables and tight inventories can 'crudely' do. More musings to follow from H-Town soon folks. Looking forward to it, meeting old friends, making new ones (and news ones too!). Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024.

Chat on software-led sustainability with AVEVA's CEO

Earlier this month, The Oilholic had the pleasure of visiting industrial software firm AVEVA's London office for a long overdue meeting with its Chief Executive Officer Caspar Herzberg.

Theme(s) of the riveting discussion, which extended way beyond the time allocated, touched on the proliferation of AI, IIoT, digital twin tech, big data and predictive analytics in the energy industry. 

All have been exponentially deployed in recent years by major energy operators conscious of their carbon footprint. Many have done so in partnership with AVEVA and the pace of adoption is only going to accelerate. 

The top 20 oil and gas companies by market capitalisation have all pledged to achieve net zero by 2050, as well as eliminate routine gas flaring by 2030, and are incrementally turning to tech solutions that AVEVA and its competitors are happy to provide. 

Herzberg told The Oilholic: "The energy majors have rapidly come around to the viewpoint that optimisation enabled by software serves the purpose(s) of improving their throughput and operating margins, reducing downtime as well as lowering their carbon footprint. 

"I also think most energy majors are now subject to significant societal pressure to lower their carbon footprint. This pressure is only going to increase. And every summer it will be ever more pressing, especially in liberal democracies where citizens are free to express their opinion and see climate change as a key concern."

It is here that the true potential of "connected solutions" may indeed be realized by the energy sector (and beyond) driven by continually improving corporate efficiencies and returns in tandem. "I would say that connected software makes things that are already possible, quicker, and frees people up to deal with more pressing issues in the value chain, rather than routine, but time-consuming tasks."

"Ultimately, AI, IIoT, digital twins, big data and analytics are all purposeful tools but at their inner core is data centricity – essentially, talking hold of data and getting value out of it."

The possibilities are infinite for the energy firms both large and small, Herzberg said. AI driven carbon capture, physics-based simulation, predictive asset optimization, streamlining processes for a green hydrogen future, making the power grid more resilient and reducing refinery or plant downtime are just some of the use cases, the AVEVA boss noted, while personally and very kindly showing yours truly a simulation on an absolutely ginormous screen. 

Away from exclusive snippets for this blog, do read The Oilholic's interview with Herzberg for Forbes here. It offers a much wider perspective on AVEVA and Herzberg's strategy for the business in the energy sector and beyond, and the company's very vocal stance on improving process efficiencies in the wider industrial world's march to a low-to-zero carbon future. Well, that's all for the moment folks, more musings to follow soon. Keep reading, keep it here, keep it 'crude'! 

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© Gaurav Sharma 2024. Photo: Gaurav Sharma with Caspar Herzberg, Chief Executive Officer of AVEVA. © AVEVA, March 2024.