07/16 Closing Prices / revised 07/17/2024 08:15 GMT |          07/16 OPEC Basket  $84.44   -$0.87 cents 07/16 Mexico Basket (MME) $74.97   -$1.06 cents  | 06/31 Venezuela Basket (Merey)  $69 23   -$1.22 cents| 07/16 NYMEX WTI  August CLQ24  $80.76 -$1.15 cents  | 07/16 ICE Brent Sept  BRNU24 $83.73 -$1.12 cents  | 07/16 NYMEX Gasoline Aug RBQ24 $2.48 -0.6 %  |  07/16 NYMEX  Heating Oil  Aug  RBQ 24   $2.47  -1.8% | 07/16 Natural Gas August NGQ 24    $2.19 +1.4%  | 07/12 Active U.S. Rig Count (Oil & Gas)    584  -1  | 07/17 USD/MXN Mexican Peso   17.6789 (data live)  | 07/17 EUR/USD   1.0910 (data live)  | 07/17 US/Bs. (Bolivar)   $36.5060000 (data BCV)

Day 2: Upstream

Day 2

This day has traditionally been for oil. We started with upstream and covered countries like India and regions like Latin America and the middle east.

Mr. S.C.L. Das of the Ministry of Petroleum and Natural Gas of India had the pleasure of starting the day. Because it was virtual, he was coming to us from India where it was night. The benefits of being virtual. He described India’s potential for offshore production but that was not enough to meet the total countries demand. The Minister stressed need the need for the country to continue importing oil and gas for a long time. LNG will be a growing percentage of their imports.

Latin America is a huge area with many countries with many different basins. Mr. Ulises Hernandez Romano of PEMEX descried his countries current situation. Most of the countries production comes from deep offshore which is expensive, around $12/bbl. Most of the cheap onshore oil and gas has been played out by conventional production. PEMEX today does see a future in the southeast onshore and shallow water to replace lost production. This production will help develop the south of Mexico that has been overlooked for a long time. This is one of the reasons the AMLO administration and PEMEX are building the countries first new refinery in this area. It will also help stimulate the petrochemical industry, LNG and the west coast of the country. Ricardo Bedregal of IHS Markit asked why Mexico was not developing its shale reserves on the border with Texas and was told that while there was cheap gas available from the USA it did not make sense.

We next heard from Juan Manuel Rojas, VP of Ecopetrol, of Colombia who talked about increasing their unconventional production through secondary and tertiary means. That technology is the key to raising their own oil and gas production. He mentioned that the country is blessed with a lot of hydro but still needed occasional imports due to seasonality. LNG imports would fill this gap in gas demand.

Petrobras followed with an explanation of their pre-salt offshore reserves which are quite substantial. Estimate at 5 to 7 tcf. They are currently under development but waiting for the government to pass policy and regulations to incentivize gas infrastructure.

One of the highlights of the day and the conference was the interview of John Kerry, Special Presidential Envoy on Climate for the USA by Dr. Ernest J. Moniz, CEO of Energy Futures Initiative. Dr Moniz has been a long-time speaker at CERAWeek. It was made clear at the beginning that they are close friends starting with working together in the Obama administration. Their friendship grew even closer on the road to the Iran nuclear deal and the Paris Accord. They could not be closer and supporters of the Biden policies on climate. Mr. Kerry talked about the main climate enemies i.e. the USA, China and the EU which currently make up 55%af carbon emissions. India, Russia and Japan are close followers. He pointed out that at the next Climate summit in Glasgow in 8 months that he will press for the greatest economic change in the world since the industrial revolution. He feels that nukes will be a bone of contention in contrast to many participants at this conference including Bill Gates. He further stated that he personally does not have anything against fossil fuels. His only problem with fossil fuels are the byproducts. The problem is carbon and methane. On a positive note, he does see a future for hydrogen especially in long haul trucking.

Mr Kerry made a point of telling the audience how bad the Texas power system is pointing to the recent cold wave and power shortages. That this could be easily fixed if Washington could take over. In addition, this would eliminate Texan chauvinism. The Texas situation reminded him of a time he was sitting in traffic in the 70’s waiting to fill his car while going to college in Boston. In his car he heard the Saudi Oil Minister (Sheikh Yamani for those that remember) saying that the stone age didn’t end because they ran out of rocks and that the oil age won’t run out of oil because we run out of oil. In summary, he reminded CERAWeek that the Biden administration team will save the world from oil and gas pollution.

Following the climate zar we heard from 2 of the largest oil companies in the world. Chevron and Saudi ARAMCO. Arguably ARAMCO is more than an oil company and the largest company in the world. Mr. Amin Nasser, CEO of Aramco told of the plans the Kingdom had to take the country in to a new future with technology and renewables. An example is that the Kingdom was the first to ship green hydrogen in the form of ammonia to the far east.

It is also fair to say that both are more than an oil company. Both have deep roots. An example is Chevron history that goes back to Standard Oil days. Michael Wirth, CEO of Chevron told a story of a book he keeps on his desk that guides his work ethics. The book is The Standard Oil Spirit published back in 1923. ESG was first talked about in this book. Chevron’s work philosophy traces back to this. He went on the describe the recovery in oil demand after the virus. He feels that natural gas and LNG will replace coal and will continue to be a base load fuel. LNG will play an especially important role in the low carbon economy and in new hydrogen production. Mr. Wirth described how the company is evolving and using technology by such things as directional drilling being done from home. Technology today allows many workers to work from home.

We are only halfway through the day. More to follow.

By Todd Peterson for Petroleumworld / March 2, 2021

Todd Peterson was born and raised in Venezuela and has a family tradition of working in the
oil and gas industry. He has worked in E&P, refining, natural gas marketing, shipping and LNG


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