Davos and Houston are as different as chalk and cheese — or steak and fondue

Daniel Yergin (L to R), vice chairman of IHS Markit, Sara Ortwein, president of XTO Energy, Timothy Dove, president and CEO of Pioneer Natural Resources, Mark Little, CEO of Suncor Energy and Lorenzo Simonelli, chairman and CEO of Baker Hughes, take part in a panel discussion at CERAWeek energy conference in Houston, Texas, US. (Reuters)
Updated 08 March 2018
0

Davos and Houston are as different as chalk and cheese — or steak and fondue

HOUSTON: The CERAWeek by IHS Markit event is sometimes called the “Oil Man’s Davos” and on the surface the resemblance is striking: At both big gatherings of the global elite, discussing weighty matters of policy and strategy by day, and letting their hair down at night, is a succession of receptions, dinners and after-parties.
But once you scratch just a bit below the surface, the similarities fade. The two events really are chalk and cheese. CERAWeek is slick, American, energy focused and very New World; Davos is chaotic, eccentric, eclectic and very European.
The geography is the telling factor, of course. The Swiss event is held 5,000 feet up on an Alpine mountain, constrained within the borders of a small town, and spills over from the Congress Hall to the frosty anarchy of the hotels, bars and cafes around.
Houston is the fourth largest city in the US, with a population of more than two million people, and is accessible by land, sea and air from George Bush International and other local airports. It is a real urban hub for west Texas, an American city given over to the motor car, with big open freeways linking the sprawling suburbs to the gleaming new downtown.
Every city block seems to have its own gigantic parking lot or multi-story parking block. The space given over just to parking would be enough for several hotels, chalet apartments and even a ski-run in Davos.
The other big difference is the central venue. Houston has one, Davos hasn’t. You can get through the week of the World Economic Forum (WEF) annual meeting without ever setting foot in the Congress Hall, following events on live stream from the Belvedere hotel with the other “Masters of the Universe.”
In the Bayou city, 99 percent of the action takes place on four floors of the Hilton Americas, a huge hotel and conference complex set in the midst of the sparking new downtown area. There are events around and about the Hilton — the Grove steakhouse on Lamar Street is known as a power dining hub — but you can easily spend the whole week just in the Hilton.
If you do venture outside, the other obvious difference between Houston and Davos hits you straight away: You can walk the streets of Houston in the comfort of a business suit and normal shoes, without having to don extreme weather gear every time you leave the indoors.
At this time of year, Houston is a pleasant climate, in the low 20s, with the occasional refreshing shower to keep you stimulated. The summer is hot, stuffy and humid, they tell me, and in autumn there is the ever-present risk of hurricanes like Harvey, the one that devastated Houston last year. But for CERAWeek, the weather is perfect.
The two events share another similarity, in that they are each the creation — largely — of one man. Klaus Schwab founded the WEF and led Davos through 48 years of WEF annual meetings, while Daniel Yergin has overseen CERAWeek through 37 years of gatherings.
Yergin, who won the Pullitzer Prize with his epic history of the oil industry “The Prize,” is ubiquitous at CERAWeek, running the event almost single-handedly, chairing and moderating events from dawn to dusk. Schwab only comes out of his Chairman’s Office for the really big ones, like — embarrassingly — Donald Trump at this year’s event. Where Schwab is oleaginous and deferential, Yergin is probing and incisive.
One final difference: Davos has fondue and skiing, Houston has steak and the rodeo, an annual celebration of Texan cowboy heritage that coincides with CERAWeek. An assessment of the latter will follow soon.


Saudi pledges ‘measurable’ oil supply boost as OPEC, Russia agree deal

Updated 23 June 2018
0

Saudi pledges ‘measurable’ oil supply boost as OPEC, Russia agree deal

  • OPEC agreed with Russia and other oil-producing allies to raise output from July
  • The green light was widely expected after energy ministers from the Organization of Petroleum Exporting Countries already agreed on Friday to raise output by one million barrels a day

VIENNA: OPEC agreed with Russia and other oil-producing allies on Saturday to raise output from July, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.
The Organization of the Petroleum Exporting Countries had announced an OPEC-only production agreement on Friday, also without clear output targets. Benchmark Brent oil rose by $2.5 or 3.4 percent on the day to $75.55 a barrel.
On Saturday, non-OPEC oil producers agreed to participate in the pact but a communique issued after their talks with the Vienna-based group provided no concrete numbers amid deep disagreements between OPEC arch-rivals Saudi Arabia and Iran.
US President Donald Trump was among those wondering how much more oil OPEC would deliver. “Hope OPEC will increase output substantially. Need to keep prices down!” Trump wrote on Twitter after OPEC announced its Friday decision.
The United States, China and India had urged oil producers to release more supply to prevent an oil deficit that could undermine global economic growth.
OPEC and non-OPEC said in their statement that they would raise supply by returning to 100 percent compliance with previously agreed output cuts, after months of overproduction.
Saudi Energy Minister Khalid Al-Falih said OPEC and non-OPEC combined would pump roughly an extra 1 million barrels per day (bpd) in coming months, equal to 1 percent of global supply.
Top global exporter Saudi Arabia will increase output by hundreds of thousands of barrels, he said, with exact figures to be decided later.
Russian Energy Minister Alexander Novak said his country would add 200,000 bpd in the second half of this year.
Asked to what extent the decision to increase supply had been driven by pressure from Trump, Novak said: “It is obvious that we are not being driven by tweets but base our actions on deep market analysis.”
IRAN, SAUDI DISAGREEMENT
Iran, OPEC’s third-largest producer, had demanded OPEC reject calls from Trump for an increase in oil supply, arguing that he had contributed to a recent rise in prices by imposing sanctions on Iran and fellow member Venezuela.
Trump slapped fresh sanctions on Tehran in May and market watchers expect Iran’s output to drop by a third by the end of 2018. That means the country has little to gain from a deal to raise output, unlike Saudi Arabia.
Iranian Oil Minister Bijan Zanganeh said the real increase could amount to as little as 500,000 bpd because Saudi Arabia would not be allowed to pump more on behalf of Venezuela, where output has collapsed in recent months.
“Each country which has produced less (than its allocation) can produce more. Those which cannot, will not... This means that Saudi Arabia can increase its production by less than 100,000 bpd,” Zanganeh told Argus Media.
But Falih said pro-rata quota reallocations did not have to be strict, meaning Saudi wanted to fill the gaps left by others.
“Some of the countries ... are not going to be able to produce, so the others will. And that implies there will be indirectly a reallocation,” Falih said.
He also said OPEC could hold an extraordinary meeting before its next formal talks due on Dec. 3 or adjust deliveries in September, when its monitoring committee meets, if global oil supply fell further because of sanctions on Iran.
OPEC and its allies have since last year been participating in a pact to cut output by 1.8 million bpd. The measure had helped rebalance the market in the past 18 months and lifted oil to around $75 per barrel from as low as $27 in 2016.
But unexpected outages in Venezuela, Libya and Angola have effectively brought supply cuts to around 2.8 million bpd in recent months.
Falih has warned the world could face a supply deficit of up to 1.8 million bpd in the second half of 2018.
“Both Saudi and Iran can show that they won,” an OPEC delegate said.
“Zanganeh can go back to his country and say ‘I won’, because we are keeping the original agreement unchanged. Falih can go back and say ‘we will be able to raise production to meet market needs’.”
The United States, which rivals Russia and Saudi Arabia for the position of world No.1 oil producer, is not participating in the supply pact.