IHS CERAWeek: Energy's new era

Energy executives celebrated the oil and gas industry’s trend upward at IHS CERAWeek’s 32nd annual conference in Houston.

“Exaggerated concerns about scarcity and security of oil supplies have been dispelled,” said Saudi Aramco CEO Khalid Al-Falih during his Tuesday morning keynote address.

Similarly ConocoPhillips Chairman and CEO Ryan Lance noted in his keynote address that the energy landscape has changed remarkably from the past 10 years.

“We’re in a brave new world, thanks to unconventional resources,” Lance said. “What everyone once assumed was energy scarcity, looks more like energy abundance today.”

While the industry’s outlook is positive now, Al-Falih urged the energy industry to avoid complacency.

“We need to build greater resilience,” Al-Falih said. “Rosy forecasts do not always materialize.”

Al-Falih stressed that the industry should anticipate volatility and diversify portfolios. Saudi Aramco is currently investing in downstream and petrochemicals; Al-Falih also said Aramco will make a significant investment in renewables, saying that they will have an important role in the future.

Security concerns in the industry remain and are now centered on networks. A recent cyber attack that wiped out 30,000 computers at Saudi Aramco was a teachable moment for the company and the industry. Al-Falih mentioned the attack while advocating for the industry to take a broader view of security in order to plan for these assaults.

“There are a lot of bad guys out there,” Al-Falid said.

Call to arms

In his address, Lance rallied for collaboration among governments, communities and the industry. However, Lance urged government to play fair as he threw his support behind the Keystone XL pipeline and the idea of US LNG and crude oil exports.

“Government should provide a level playing field; don’t pick preferred energy sources or solutions,” Lance said. “The Obama Administration itself says the US needs an “All of the Above” energy policy. It should live up to those words.”

Overcoming misconceptions

Delivering the lunch-time keynote, CNOOC CEO Li Fanrong addressed misconceptions about the Chinese firm’s international investments, setting out to defend CNOOC only a week after finalizing its takeover of Canadian oil player Nexen.

“(People think) we are supposedly doing this because we want to bring every barrel of oil back to China, or have other agendas other than global business,” Fanrong said of skeptics. “I believe everyone with global market knowledge knows that is not true.

“That notion does not make any commercial sense,” he said. “Chinese oil companies are active participants on both the demand and supply sides.”

Fanrong said what made Nexen so attractive was its large offshore footprint with quality assets off Canada, Nigeria, and the Gulf of Mexico.

“I’ve been asked many times, ‘Why Nexen?’,” Fanrong said during a question and answer session. “The most important (factor) is their experienced management team. We are keeping them in place because of past success and contributions.”