Total chief predicts US shale oil industry to see wave of investment

Patrick Pouyanne, CEO of Total. (Reuters)
Updated 18 October 2017
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Total chief predicts US shale oil industry to see wave of investment

LONDON: The US shale industry will see another wave of investment as producers are betting strongly against a fall in oil prices, the CEO of Total, Patrick Pouyanne, said on Wednesday.
Speaking at the Oil & Money conference in London, he said he expected global oil demand to grow strongly again this year, by up to 1.6 million barrels per day (bpd).
“Our US colleagues are hedging like mad at $56 a barrel so we will see another wave of investment in US shale, no doubt about it,” Pouyanne said.
A sharp fall in investment since oil prices collapsed in 2014 has led to a drop in development of new projects, which could spark an oil supply shortage after 2020, Pouyanne said.
Pouyanne said the rate of final investment decisions (FIDs) in exploration and production had shrunk too much since 2015.
“The number of FIDs from 2010-2014 averaged 35 FIDs per year ... to add potentially 2.5 million bpd,” he said.
“Since 2015, it’s 12 per year to add 1 million bpd — that’s probably not enough. Post-2020, we will face an issue with these lower numbers of FIDs. It takes time to bring new capacity to production.”
He later said Total expects to give a green light by the year-end for the development of the Libra offshore field in Brazil, which will produce up to 150,000 bpd.
On the OPEC side, the oil chief sees Russia and Saudi Arabia extending production cuts.
OPEC and several non-OPEC producers agreed late last year on a six-month output-cutting deal from January to tackle a global glut. The deal has been extended until March 2018.
A visit by the Saudi king to Moscow recently “is a clear signal (that) it is in the interest of both countries to support the market. I will not be surprised to see the extension,” Pouyanne said.


SoftBank’s Son says Japan is ‘stupid’ to disallow ride-sharing

Updated 19 July 2018
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SoftBank’s Son says Japan is ‘stupid’ to disallow ride-sharing

  • ‘Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country’
  • SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber, Didi, Ola and Grab, as well as in other technology companies

TOKYO: SoftBank Group Corp. Chief Executive Masayoshi Son blasted Japan on Thursday for not allowing ride-sharing services, calling it “stupid” and saying the country was lagging overseas rivals in areas such as artificial intelligence (AI).
“Ride-sharing is prohibited by law in Japan. I can’t believe there is still such a stupid country,” Son said at an annual company event aimed at customers and suppliers.
The comments reflect Son’s frustration with Japan where he built SoftBank’s domestic telecoms business, the cash engine that has powered his investments. The group has, however, focused its growing range of technology investments overseas.
Son has also been highly critical of the government previously when SoftBank was still a fledgling telecoms service trying to break up a cozy duopoly in Japan.
“A country that gives up on the future has no future,” Son told attendees at the SoftBank World event, saying Japanese business is lagging behind countries such as the United States and China in employing AI.
Japan outlaws non-professional drivers from transporting paying customers on safety grounds and the country’s taxi industry lobby has vigorously opposed deregulation.
Its strict rules have confined ride-sharing firms to providing limited services, with SoftBank and China’s Didi Chuxing saying on Thursday they will trial a taxi-hailing service — matching users to pre-existing taxi operators — in Osaka beginning autumn of 2019. Uber is also piloting a taxi-hailing service.
When asked for a response to Son’s comments, a spokesman for the Ministry of Land, Infrastructure, and Transport said that an issue with ride-sharing services was that while the driver was in charge of transporting passengers, it was unclear who was in charge of maintenance and operation.
“The ministry believes that offering these services for a fee poses problems from the points of both safety and user protection, and careful consideration is necessary,” he said.
Ride-sharing is not the only service in Japan feeling the impact of government restrictions. Strict new rules on home-sharing came into force last month that have radically reduced the number of lettings on sites such as Airbnb Inc.
The curbs on Japan’s nascent sharing economy come despite a rapid rise in the number of inbound tourists likely to access such sharing services, and at a time when Japan is wanting to show its international face ahead of hosting the Rugby World Cup next year and the Summer Olympics in 2020.
While Son, an ethnic Korean born in Japan, has at times criticized the Japanese government, he can also be politically suave. He has praised US President Donald Trump with warm words and pledged to invest billions of dollars and create thousands of jobs in the United States.
SoftBank and its nearly $100 billion Vision Fund have invested in ride-sharing firms Uber Technologies Inc, Didi, India’s Ola and Southeast Asia’s Grab, as well as in other technology companies.
The event on Thursday saw presentations from executives at portfolio companies including Didi, General Motors’ autonomous vehicle unit Cruise and India digital payments firm Paytm E-Commerce Pvt Ltd.
Artificial intelligence is the common thread linking these companies, Son said, with that technology in the future able drive vehicles, diagnose diseases and power financial services.