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Opec to meet with US shale firms on Monday
February 28, 2018 | 11:05 AM
by Reuters
Opec led by Saudi Arabia and non-Opec Russia have reduced production during 2017-2018 to prop up oil prices. - Times file picture
 
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London/Houston: Opec will hold a dinner on Monday in Houston with US shale firms, two industry sources said, the latest sign of the producer group widening talks about how best to tame a global oil glut.

Opec Secretary General Mohammad Barkindo plus other Opec officials will attend the dinner, one of the sources said. A second source said the chief executives of US shale companies of various sizes have been invited. The meeting will be on the first day of the CERAWeek energy conference in Houston. A year ago, the Organisation of the Petroleum Exporting Countries 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 led by Saudi Arabia and non-Opec Russia have reduced production during 2017-2018 to prop up oil prices.



The United States, which rivals Russia and Saudi Arabia for the position of the world's largest oil producer, is not participating in cuts as its industry is represented by private producers who can be sued for collusion if they join the deal.

The Opec cut has boosted prices, which topped $71 a barrel this year for the first time since late 2014. But the rally is spurring renewed growth in shale output, offsetting the Opec-led effort.

The International Energy Agency (IEA) said on Tuesday the United States will overtake Russia as the world's biggest oil producer by 2019 at the latest, as the country's shale oil boom continues to upend global markets.

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."

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