From ‘demon oil’ to the media scrum — lessons from WEC
The World Energy Congress (WEC) does not come around very often — only 24 times since it was founded in 1924 — so the host country should make the most of its opportunity as a venue for thought leaders in the vitally important energy sector.
Abu Dhabi, which is hosting the event still underway in the UAE capital, certainly did that, with a guest list that read like a “who’s who” of global energy. It was a great opportunity to get up close with the movers and shakers of an industry that is at the heart of business, economics, technology — and politics.
Here are six things I learned during the opening two days of the gathering, which closes tomorrow.
1 The energy business is under pressure as never before.
“Big bad energy” — whether it is the oil business, fracking, transportation or generating — is coming under increasing attack from people who blame it for virtually all the ills of the world, from climate change to labor exploitation.
Speakers in Abu Dhabi talked about how the “demonized” oil industry was on the defensive, and facing a “crisis of perception,” especially among a younger idealistic generation.
One expert raised the prospect that the energy business was becoming “uninvestible” as bankers and financiers took fright at future prospects, particularly for traditional fossil fuels and especially in the US.
2 The US has thrust itself back to the center of the oil world.
For its critics, the oil business has two stereotypes: an Arab sheikh in a dish-dash and a Texan cowboy in a 10-gallon hat. The latter is once again becoming the hate figure of choice.
The US’s shale revolution has made it — for the time being at least — the most important producer in the world. US energy officials in Abu Dhabi forecasted 13.5 million barrels per day of US oil next year and were only vaguely concerned about the possibility that the shale boom might hit financial buffers any time soon.
Despite the unpredictability of President Donald Trump’s administration regarding oil — he appears to want low gas prices more than a heathy industry — the Texans are just getting on with pumping the black stuff.
3 The rest of the oil world is still unsure how to respond to Uncle Sam.
Largely under the guidance of Saudi Arabia and Russia, the US’s two closest energy rivals, oil exporters have begun to organize themselves. The OPEC+ alliance has, reasonably successfully, capped output to keep oil prices higher than they would have been given the American glut. But they appear unsure where to go next.
Saudi Arabia and Russia want to formalize and widen OPEC+; OPEC, as its Secretary-General Mohammed Barkindo explained, wants an even bigger alliance, encompassing all the 97 oil producers in the world. Some strategic clarity is required.
4 Saudi Arabia is an even more crucial part of the global oil jigsaw than ever.
WEC attendees flocked to hear the words of the new Saudi oil minister, Prince Abdul Aziz bin Salman, and the media scrum surrounding him was equaled only by the one that threatened to overwhelm the Aramco chief executive, Amin Nasser (see below).
The Kingdom has borne the brunt of the production cuts that have kept the oil price reasonably high, even if that has meant the Texans can keep pumping it out. At some stage, Saudi policymakers will have to decide whether ongoing production cuts are worth the economic downside.
5 Saudi Aramco will dominate headlines in the corporate oil business for the rest of the year.
At last, we have heard it from the horse’s mouth: Nasser said that the long-awaited stock market launch would be happening “very soon,” initially on the Kingdom’s Tadawul, before Aramco and its advisers go on to think of a secondary listing on a foreign exchange.
6 The oil industry “media scrum” is becoming dangerously unruly.
Originally a phenomenon from the Vienna OPEC meetings, media representatives and organizers in Abu Dhabi took it to another level.
While the gathering around Prince Abdul Aziz retained some semblance of civility, the feeding frenzy that accompanied Nasser presented serious risk to life and limb and became counter-productive.
Scrum tactics should be rethought, by the media and event organizers. What about a good old-fashioned press conference?
Frank Kane is an award-winning business journalist based in Dubai.