Sultan Al Jaber, the chief executive of the Abu Dhabi National Oil Company (Adnoc), will host closed-door talks with the heads of some of the world’s top oil companies ahead of this year’s Abu Dhabi International Petroleum Exhibition and Conference (Adipec), which opens tomorrow.
Adnoc said Mr Al Jaber, who is the Minister of State as well as the head of the state oil company, will hold roundtable discussions with chiefs of 20 top oil companies, including Bob Dudley, the chief executive of BP, Rex Tillerson, ExxonMobil’s chief, and Patrick Pouyanne, the head of the French major Total.
Amin Al Nasser, the chief of Saudi Aramco, Nizar Al Adsani, the head of Kuwait Petroleum and Saad Al Kaabi, head of Qatar Petroleum, will also attend.
The Adipec gathering, which is one of the top two annual meetings in the industry’s calendar, has taken on added significance this year as ministers and top executives meet amid a round of tough negotiations aimed at agreeing some kind of output restraint by producers both within and outside Opec, the result of which will have widespread implications for the industry as a whole.
Opec ministers are due to meet formally on November 30 in Vienna to finalise terms, which have proved difficult to pin down as Iran and a number of other members claim special circumstances and refuse to contribute to any curbs. Also, there has never before been a credible deal between Opec and major non-Opec members, especially Russia, which has voiced support but still pumped oil at a post-Soviet era record last month.
The worry among the top oil companies is that their unprecedented cut in investment in response to the oil price slump may ultimately lead to a shortage in a couple of years and a resumption of the boom-bust-boom industry cycle.
“We are entering a time where societal, technological and political trends are reshaping the environment in which oil companies operate,” Mr Al Jaber said.
The Abu Dhabi summit “will provide a timely opportunity for key industry leaders to openly discuss important issues, including potential areas of partnership to advance the industry”, he said.
A key item for the talks, which will be chaired by Daniel Yergin, the vice chairman of the IHS Markit consultancy, will be what form partnerships between the international oil companies and national oil companies should take, with Adnoc looking to its US$10 billion Al Hosn project as a model, where it partnered with Occidental Petroleum to commercially exploit difficult sour (high sulphur) gas using new technologies.
Occidental’s new chief executive, Vicki Hollub, will take part, as well as Ben van Beurden, the head of Royal Dutch Shell, Claudio Descalzi, the head of Eni of Italy, and chiefs of a number of key partner companies for Adnoc, including Schlumberger, Inpex of Japan, Korea National Oil Corporation, Statoil of Norway, Indian Oil Corporation and a number of Adnoc subsidiaries and affiliates, such as OMV of Austria and Cepsa of Spain.
The International Energy Agency (IEA), the rich countries’ energy watchdog, in September said oil industry investment looks set to drop sharply for the third year in a row, with oil discoveries at their lowest level since the late 1940s.
The IEA estimated capital investment in oil and gas projects would drop by 24 per cent this year, to $450 billion, following a 25 per cent drop last year.
Investment will have fallen by more than $300bn in the past two years after the oil price collapsed from nearly $120 a barrel to current levels of about $50 a barrel, and it shows no sign of recovering next year, the agency said.
“Lower oil prices have placed an increased priority on resilience and efficiency and companies in the industry are independently searching for sustainable strategies in this new energy landscape,” Mr Al Jaber said.