DOHA (Reuters) Chief executives of the world’s top energy companies met ministers from the biggest producers on Saturday with record oil prices of above $75 a barrel speeding the race for supply investment.
A four-year rally, fueled by supply constraints from the oilfield to the refinery gate, has left both sides with bumper profits. This year, worries over Iran’s exports and crises in Iraq’s and Nigeria’s industry have pushed oil to levels that threaten economic growth.
Consumer governments are urging the likes of Exxon Mobil, BP and Royal Dutch Shell to spend money building refineries. The companies want major producers like Saudi Arabia, Kuwait and UAE to drill for more oil.
“Energy security is one of the most critical issues facing the world today,” said Chevron Chief Executive David O’Reilly ahead of the meeting.
Calls for more spending to satisfy rampant consumption would stand a better chance of being met if multinationals and the nations straddling the world’s reserves worked together — something major oil firms are beginning to recognize.
Three days of talks at the Doha meeting of the International Energy Forum will not herald a new era of cooperation, but chief executives have woken up to the reality that they must ask less of producers when seeking access to reserves.
“Today’s national energy companies are technologically and managerially sophisticated and financially very strong,” Malcolm Brinded, executive director of exploration and production at Royal Dutch Shell, said in a recent speech.
“So, what they require of their international partners is very different from in the past.”
Chief executives of Exxon Mobil, BP, Royal Dutch Shell, Chevron and ENI were at the talks which run from April 22 to 24, along with Total’s president of exploration and production.
Government ministers from 65 countries, including top consumer the United States and members of the Organization of the Petroleum Exporting Countries, were also attending.
All are in rare agreement that prices have reached the danger zone as they near their inflation-adjusted peak of more than $80 hit in 1980, the year after the Iranian revolution.
Oil shot to a new record beyond $75 on Friday.
“I expect in the medium term, two to three years, oil prices will remain high,” said ENI Chief Executive Paulo Scaroni.
OPEC producers blame much of oil’s relentless rally on a lack of refining capacity. They have called on international oil companies to invest in hardware.
But the multinationals have their sights on the low-cost energy in Middle East oil and gas fields. Locked out of OPEC countries in a wave of nationalization in the 1970s, they have fought ever since to regain access.
“We’ve all got to work hard to make sure there are no artificial barriers to getting to the energy supplies the world needs,” Britain’s Energy Minister Malcolm Wicks told reporters.
Iraq, with some off the most prized oilfields on offer, says it is ready to step up negotiations with international majors for multi-billion dollar oilfield contracts.
The first gathering of the IEF was held in Paris in response to the 1990-1991 Gulf war, when oil spiked briefly to $40 before sinking back below $20.
The last time the forum met, in Amsterdam in May 2004, importers were complaining that oil cost $40 a barrel and many believed $50 would see world economic growth grind to a halt.