Partnership must for oil companies

We compete and yet we are partners, said Wang Yilin.

Top names from the oil and gas sector said that even though they are competitors on the ground, partnerships are the key to succeed in future.
BP group chief executive Bob Dudley said oil and gas climate initiative with the likes of ExxonMobil and Chevron, Occidental Petroleum, is an example of companies coming together on a common platform in fight against climate change. "This sector is an unusual place for partnerships. We compete and yet we are partners," he said during a panel discussion held as part of at the Adipec.
Dudley noted OGCI as complicated group but led by common vision of CEOs.
"Industry groups do get together but this (OGCI) is very unique. The oil and gas climate initiative was formed four years ago with 13 companies joining with a common target to reduce emissions. We put together a $1-billion fund over 10 years for innovative low emission technologies. CO2 is an obvious threat and climate agenda is on everyone's mind."
Officials from CNPC, BP, Eni and Petronas cited natural gas sector where appetite is growing and is witnessing increased partnership.
CNPC chairman Wang Yilin said natural gas market share in China's total energy need will increase to 10 per cent by 2020. He said China welcomed partnerships as it pushes forward in Shale gas development.
"China has a 3-year action plan to improve air quality. Natural gas market has great potential for growth. CNPC welcomes all partners to work with us."
He noted that Shale gas development and exploration is in an accelerated phase in China. "We have technology ready to develop Shale gas. We work with BP to develop Shale gas. We invite all partners to invest in our shale gas."
Dudley said the role of LNG is going to grow as the US has discovered excess gas. "LNG has a role to play but it is quite regional. Industry has spent too much on energy products. So we will see more phased projects as everyone will be cautious. Commitment may not be large as in the past."
Eni chief executive officer Claudio Descalzi echoed similar sentiments and said the LNG sector requires partnerships.
"LNG is very expensive and we need strong partnership. We need relationship with contracts. Unlike long-term contracts we now see shorter contracts of say 5years. The fragile point is price," he said.
Petronas president and group chief executive officer Wan Zulkiflee said there was a new dynamism seen in market structure. "Up to 70% of our portfolio is gas. In this whole energy transition, gas is a long-term investment for us," he said and noted existing partnership with Mitsubishi and other Japanese.
- ashwani@khaleejtimes.com