Second verse, same as the first . . . in some ways.
Many of the themes raised Monday at IHS CERAWeek were reprised Tuesday, the second day of the conference. But Tuesday’s offerings were decidedly more global, and our oil editors here share some of their thoughts on what they saw and heard.
You can find news stories and tweets from Tuesday shared on @PlattsOil (including one tweet that we felt needed a retweet from @PlattsCoal). You can also read thoughts from our reporters on the first day here.
US crude export policy has become a key discussion point already at this week’s conference, including its impact on global supply and domestic production.
But a top BP official highlighted another reason for the US to drop its export restrictions: price stability.
During a refining panel, Tufan Erginbilgic, chief executive of BP Downstream, said an open US export regime would keep the WTI-Brent price spread at about $5/b consistently and limit any significant fluctuations.
Parity between the two benchmarks remains unlikely, even if all export restrictions are repealed, due to shipping costs from the US to foreign markets, but a policy shift would “smooth” dramatic changes in the differential. — Brian Scheid
Tuesday’s word of the day: “efficiency.” After spending Monday telling the industry why it shouldn’t falter in its investments, speakers at IHS CERAWeek all seemed to agree on at least that one adjective for what the investments should actually look like.
“We lost some control of the way we spend our money, and we have to get back some of our efficiency,” said Total CEO Patrick Pouyanné. (Here’s also some other notable tidbits from Pouyanné.)
Executives pointed to several examples of what that might actually look like throughout the day, including ongoing cost-cutting measures in production operations, and ways in which companies can revitalize old oil wells in places like the North Sea.
“We must do more than just hit the brakes,” said Statoil CEO Eldar Sætre. He said the industry participants have to evolve to be more adaptable and, yes, efficient to survive the low-price environment. — Joshua Mann
The US’ Permian Basin of West Texas and New Mexico is probably only in the “second or third inning” of its full development potential, the CEO of one of the largest Permian operators said Tuesday.
Two prolific Permian horizons — the Spraberry and Wolfcamp in the eastern part of the basin — contain about 75 billion barrels of equivalent recoverable oil, while the western part of the basin holds another 25 billion barrels recoverable, Pioneer Natural Resources CEO Scott Sheffield said during an upstream panel.
Sheffield noted the Bakken Shale in North Dakota and Montana contain another 25 billion boe at least, while the Eagle Ford Shale in South Texas contain another 25 billion boe. That all adds up to 150 billion boe of recoverable resources added from three giant shale plays, he added, which really only began to be developed unconventionally in the last four to five years.
“These are essentially the four largest fields” in the US, Sheffield said. (Full story here.) — Starr Spencer