OpeOluwani Akintayo
01 March 2018, Sweetcrude, Lagos – In a bid to reduce the glut in the oil market and boost prices, Secretary-General of the Organisation of the Petroleum Exporting Countries, OPEC, Dr. Mohammed Barkindo, will lead a team from the group to meet with the U.S. shale producers on Monday.
Quoting two industry sources, Reuters said OPEC will hold a dinner on Monday in Houston with U.S. shale firms, and has invited chief executives of U.S. shale companies of various sizes.
The meeting will be on the first day of the CERAWeek energy conference in Houston.
On Tuesday, OPEC representatives will then hold a dinner with U.S. hedge funds who have invested in shale firms, one source said.
A year ago, the OPEC held unprecedented talks with fund executives and shale producers on the sidelines of the same event.
“Shale has dramatically changed the world’s perception of fossil fuels,” said the chief executive of one shale company, declining to be identified by name.
“We now have a seat at the table on pricing.”
OPEC and non-OPEC Russia agreed to reduce oil output by 1.8 million barrels by day since January 2017, however, increasing production from shale producers keeps disrupting targets and eating deep into OPEC’s quota.
The deal which has since been extended twice till end of 2018, has seen prices rise to $71 per barrel early January first time since late 2014.
However, analysts wonders if OPEC’s meeting with shale producers would be positive as the United States, which currently seeks to be top oil producer by at most 2019, is not participating in cuts as its industry is represented by private producers who can be sued for collusion if they join OPEC’s deal.
The International Energy Agency said on Tuesday the United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest.
OPEC officials say they are not worried about a renewed surge in shale swamping its efforts this year, but have urged shale producers to help curtail global supply.
“It’s normal for shale oil, tight oil to increase in 2018 and whenever oil prices support it,” said Iraq’s national representative to OPEC, Ali Nazar, at an event in Berlin on Tuesday.
“But we all should look with responsibility to the market in order to keep the balance in the market as much as we can so as not to harm investors.”
