Shale Boom Dominates Houston Energy Confab

The world’s largest oil producers appealed to US shale producers to join efforts to hold global prices at their current level at a major energy conference on Monday, as the boom in shale is continuing to undermine OPEC’s production curbs.

OPEC Secretary-General Mohammed Barkindo said on Monday at the CERAWeek conference in Houston that there is “common understanding” between oil-producing nations and US shale producers that “we all belong to this industry,” even as US exports have eroded OPEC’s market share over the last year, Reuters reported.

This year’s CERAWeek conference continues the outreach between the Organization of Petroleum Exporting Countries and shale producers.

Members of OPEC will meet with shale producers on Monday at a dinner for the second year in a row, though Barkindo said price levels and production will not be discussed.

However, shale’s surge last year was heavy on the minds at the Houston conference, particularly as US production surged to an all-time record late last year.

Nigeria’s Oil Minister Emmanuel Ibe Kachikwu was more explicit than Barkindo, saying that oil majors operating in both shale fields and in OPEC member states should bear some responsibility for prices.

“We need to begin to look at companies that are very active in these areas and begin to get them to take some responsibilities in terms of stability of oil prices,” Kachikwu said on the sidelines of the CERAWeek energy conference in Houston, though he did not name any specific companies.

“Some of the same companies that are working in shale are the same companies working in OPEC member countries.”

The price of oil rose steadily throughout 2017 in the wake an agreement between OPEC and non-OPEC members, including Russia, to cut production by 1.8 million barrels a day beginning last year.

That surge in prices, however, boosted US production sharply, which hit a record in November 2017 at more than 10 million barrels a day and is expected to surpass 11 million barrels a day later this year.