DAVOS: US oil producers sought on Wednesday to soothe OPEC’s worries about losing market share, telling the group that investors in the US firms wanted a reduction in growth and higher payouts.
The Organization of the Petroleum Exporting Countries and non-OPEC allies such as Russia have cut output since 2017 to support oil prices, while watching producers in the United States, which is not party to the cuts, drive up production.
The United States has overtaken Russia and Saudi Arabia to become the world’s biggest crude producer. Output is approaching 12 million barrels per day (bpd).
OPEC’s forecasts and even US government predictions have repeatedly underestimated US output growth.
The bosses of US firms Occidental Petroleum and Hess Corp, attending a session at the World Economic Forum in Davos, said that growth of US shale oil output would slow.
The session was a rare occasion when US producers and an OPEC representative, OPEC Secretary-General Mohammed Barkindo, sat on the same panel.
“I believe not as much money will be pouring into the Permian basin this time. I believe investors will hold companies accountable for returns and a lot of this didn’t happen previously,” Occidental Chief Executive Vicki Hollub said.
Echoing her comments, Hess Corp. founder and Chief Executive John Hess said shale production now accounted for about 6 percent of global production. “It will probably go up to 10 percent by mid-decade but then it flattens out,” he said.
But he added that US resources would start to degrade. “Shale is not the next Saudi Arabia. It is an important short-cycle component,” he said.
US President Donald Trump has repeatedly criticized OPEC for manipulating prices and demanded several times last year that the group bring them down. He has also praised OPEC, and its de facto leader Saudi Arabia, when prices have fallen.
Oil prices surged above $86 a barrel in October, but have since slipped back. On Wednesday, Brent was about $62.
Barkindo said OPEC aimed to balance supply and demand and had helped the United States by rescuing its oil industry from ultra-low oil prices.
“The oil industry is under siege globally,” Barkindo said, adding that OPEC wanted to talk more regularly to US producers to understand their industry better even if they could not participate in any OPEC-led production cuts.
In response, Hess said: “OPEC plays a very important role in stabilising the market and those efforts need to be recognized.”
Fatih Birol, the head of the International Energy Agency, which represents industrialized nations, said most forecasts were still underestimating US oil production growth.
“There is a huge potential in the US,” Birol told Reuters, adding that the United States could raise output by another 10 million bpd in the next decade.
US oil firms tell OPEC their growth will slow
US oil firms tell OPEC their growth will slow
- The United States has overtaken Russia and Saudi Arabia to become the world’s biggest crude producer
- OPEC’s forecasts and even US government predictions have repeatedly underestimated US output growth
Saudi investment pipeline active as reforms advance, says Pakistan minister
ALULA: Pakistan’s Finance Minister Mohammed Aurangzeb described Saudi Arabia as a “longstanding partner” and emphasized the importance of sustainable, mutually beneficial cooperation, particularly in key economic sectors.
Speaking to Arab News on the sidelines of the AlUla Conference for Emerging Market Economies, Aurangzeb said the relationship between Pakistan and Saudi Arabia remains resilient despite global geopolitical tensions.
“The Kingdom has been a longstanding partner of Pakistan for the longest time, and we are very grateful for how we have been supported through thick and thin, through rough patches and, even now that we have achieved macroeconomic stability, I think we are now well positioned for growth.”
Aurangzeb said the partnership has facilitated investment across several sectors, including minerals and mining, information technology, agriculture, and tourism. He cited an active pipeline of Saudi investments, including Wafi’s entry into Pakistan’s downstream oil and gas sector.
“The Kingdom has been very public about their appetite for the country, and the sectors are minerals and mining, IT, agriculture, tourism; and there are already investments which have come in. For example, Wafi came in (in terms of downstream oil and gas stations). There’s a very active pipeline.”
He said private sector activity is driving growth in these areas, while government-to-government cooperation is focused mainly on infrastructure development.
Acknowledging longstanding investor concerns related to bureaucracy and delays, Aurangzeb said Pakistan has made progress over the past two years through structural reforms and fiscal discipline, alongside efforts to improve the business environment.
“The last two years we have worked very hard in terms of structural reforms, in terms of what I call getting the basic hygiene right, in terms of the fiscal situation, the current economic situation (…) in terms of all those areas of getting the basic hygiene in a good place.”
Aurangzeb highlighted mining and refining as key areas of engagement, including discussions around the Reko Diq project, while stressing that talks with Saudi investors extend beyond individual ventures.
“From my perspective, it’s not just about one mine, the discussions will continue with the Saudi investors on a number of these areas.”
He also pointed to growing cooperation in the IT sector, particularly in artificial intelligence, noting that several Pakistani tech firms are already in discussions with Saudi counterparts or have established offices in the Kingdom.
Referring to recent talks with Saudi Minister of Economy and Planning Faisal Alibrahim, Aurangzeb said Pakistan’s large freelance workforce presents opportunities for deeper collaboration, provided skills development keeps pace with demand.
“I was just with (Saudi) minister of economy and planning, and he was specifically referring to the Pakistani tech talent, and he is absolutely right. We have the third-largest freelancer population in the world, and what we need to do is to ensure that we upscale, rescale, upgrade them.”
Aurangzeb also cited opportunities to benefit from Saudi Arabia’s experience in the energy sector and noted continued cooperation in defense production.
Looking ahead, he said Pakistan aims to recalibrate its relationship with Saudi Arabia toward trade and investment rather than reliance on aid.
“Our prime minister has been very clear that we want to move this entire discussion as we go forward from aid and support to trade and investment.”
