Guest Review
Special Review (Part One): 2011 World Assembly Written by Nuala Gallagher, Editor, International Resource Journal (IRJ)
Convening over 900 oil and gas industry and investment heads, more than 65 speakers and 40-plus industry partners at The Oil Council’s London-held 2011 World Assembly (and 650-seater black tie awards dinner) seems a staggering feat – especially as current industry news coverage swings wildly from disaster to discovery. Ever- risk conscious investors continue to be embattled by volatile equity prices, nettled by the ongoing woes (and headlines thereof) when it comes to Europe’s sovereign debt crisis.
These are uncertain times for the entire energy industry as share prices falter and polarised views on sector outlook abound; nonetheless, at this high profile intercontinental meet the industry’s great and good remained realistic about how business will fare in the coming months and how best to tackle challenges – neither white- washing mishaps or downplaying the deals worth celebrating.
Price Tides: A Return to 2008?
In tackling those beholden to hindsight head on, Jeffrey Currie, Global Head of Commodities Research at Goldman Sachs, chose to channel the wisdoms of Mark Twain on day one of the Assembly when he reminded onlookers that “history doesn’t repeat itself”.
Underlying fears that oil prices may again undergo 2008-style falls from all-time highs to barrel-scraping lows will impact the market regardless of whether a full blown financial crisis sweeps through, explained the man who famously told investors that financial worries were “overriding” market fact the first time round. Currie advised against fearing economic weakness in the U.K. and U.S., instead emphasising the seriousness of financial stress as he described how moves to “avoid the whirlpool of the sovereign debt crisis,” could send everyone “sailing right into the rocks.”
In addition to reiterating Goldman’s September 11 statement forecasting that the U.S. will become the world's largest oil producer in 2017, Currie outlined the emerging hydrocarbon provinces on the banking giant’s radar. “Most of the supply growth we see for next year is coming from Libya and Iraq,” he said. As the two-day Assembly rolled on, it transpired that Goldman and Currie are not alone in these forecasts.
Media Leaps on Libyan Interest
Within minutes of hitting the conference atrium, reporters shuttered copy across newswires and one subject reigned supreme: who was readying to enter Libya and how? Prominent energy houses hailing from Kuwait, Germany and Denmark (to name a few) professed varying levels of interest and activity, and each appeared to stress that the catalyst behind choosing to enter the country is how contractual arrangements will take shape when the nation forms a democratically-elected government.
Speaking to MarketWatch on the sidelines, Sara Akbar, CEO of Kuwait Energy Company said that the company can “see Libya as a great opportunity under the new government,” and has just begun putting together proposals for working with the Libyan NOC in the future. In the long term, she said, Kuwait Energy Company will look at opportunities for new licenses. Her comments on initial interest – government and industry contract formation depending – were echoed by Jon Ferrier, EVP for Business Development and Strategy at Maersk Oil & Gas, who told the news agency that the company plans to send a team to Libya and weigh up its own future options.
Enter Iraq, Enter Industry
The work of energy giant ExxonMobil Corporation (and local unit ExxonMobil Iraq Ltd.) in the Kurdish region of Iraq remained suitably high on the agenda; the firm’s six oil and gas exploration deals in the country have rarely received as much coverage as they have of late. However, the assembly offered those in the industry-know a chance to level the playing field away from sensational headlines and debate the positive impact the multinational will have on both the local level market and global perceptions surrounding it. John Gerstenlauer, COO for Gulf Keystone Petroleum told The Wall Street Journal that it is impossible for an explorer bearing Exxon’s enormous presence to “do what it has done and not change the dynamics,” as he explained that the dealings taking place between the company and the Kurdish government depict “an element of credibility,” to Kurdish officials.
Drillers and Dealers :::
::: December 2011 Edition
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