CERAWeek Diary: Houston buzzing ahead of ‘oil man’s Davos’ — or was it the 16-hour flight?

CERAWeek by IHS Markit is appropriately held in Houston, in the ‘Republic of Shale.’ (Supplied)
Updated 11 March 2019
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CERAWeek Diary: Houston buzzing ahead of ‘oil man’s Davos’ — or was it the 16-hour flight?

  • CERAWeek by IHS Markit is widely regarded as Pulitzer-winning historian of the oil industry Daniel Yergin’s show
  • Much like the Steigenberger Grandhotel Belvedere in Davos, the Hilton Americas is the epicenter of the CERA experience

HOUSTON: Downtown Houston was buzzing on the eve of the Texan city’s big event: The oil man’s Davos — otherwise known as CERAWeek by IHS Markit — the annual gathering of the masters of the energy universe.

Nobody actually uses the “by IHS Market” bit in casual conversation — it’s just CERAWeek. But because the event’s wonderfully efficient communications people spend a lot of time specifying exactly how the event should be referred to, it would be churlish not to give it its full brand name — on first mention at least.

It is also widely regarded as the Daniel Yergin show. The Pulitzer-winning historian of the oil industry — as author of “The Prize” — is absolutely everywhere at the five-day event, from crack-of-dawn breakfast meetings to more informal late-evening gatherings.

I almost expected him to be manning the concierge desk at the Hilton Americas-Houston hotel and conference center, where the event takes place and where most of the energy movers and shakers stay.

CERAWeek — with the invaluable help of information provider IHS Markit — has got so big in recent years that it has taken extra space in the George R. Brown Convention Center across the sky bridge to stage its “Innovation Agora” forum, a celebration of all that is high-tech in the energy world. Completing the classical allusion, it also houses a “Lyceum Program” of workshops and other interactive technology fireworks.

The theme of the main conference this year is the “New World of Rivalries.” No doubt the organizers mean the three-way pull between the US, Saudi Arabia and Russia for dominance of the global oil industry, which has been given real substance by the incredible recent production record of the US shale industry.

Texas, with its booming Permian Basin, has been at the heart of that incredible growth. One Texan oil services worker I chatted to on the 16-hour flight from Dubai — maybe that’s the real reason I thought Downtown Houston was buzzing — called The Lone Star State the “Republic of Shale.”

That phrase might catch on. Texas has in the past had a “redneck” reputation, but lately its politics have become far more progressive — some of the local Republicans are actually lobbying for more relaxed attitudes to tax and other social issues. Should we tell the US president?

Much like the Steigenberger Grandhotel Belvedere in Davos, the Hilton Americas is the epicenter of the CERA experience. The night before the event was formally launched, the lobby bar was a nest of intrigue. Internationally renowned energy journalists doorstepped executives from all round the world. The air was thick with Arabic, Russian and English, with a lot of Spanish in the background, not least at Pappasito’s Cantina, a Tex-Mex fun-palace near the CERA HQ.

Over the way, The Grove bar and restaurant — scene of high-stakes negotiations in recent years — was virtually empty on CERA-eve, but a steady stream of visitors, many from the Middle East, were enquiring about dinner reservations later in the week. Expect some imminent revelations from the internationally renowned energy journalists.

But here is the nice thing about Houston, and Texas. Just around the corner from the Hilton Americas, there is a lovely open area called Discovery Green: An expanse of green amid the high rise glass and concrete, with a roller rink (this is Texas) and a beautiful cosmopolitan family feel to it — not a wall in sight.

There, somebody has set up a display of children’s paper windmills, extending over an area the size of several tennis courts. A giant (again, this is Texas) wind-blowing machine makes all the windmills go crazy at the same time, gyrating madly in the humid air. A sign said: “Se el viento — be the wind.” I think it’s a message from enlightened Houstonians to Big Oil, and the wall-builders.


US eases restrictions on China’s Huawei to keep networks, phones operating

Updated 21 May 2019
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US eases restrictions on China’s Huawei to keep networks, phones operating

  • The company is still prohibited from buying American parts and components to manufacture new products without license approvals
  • Out of $70 billion Huawei spent buying components in 2018, some $11 billion went to US firms
WASHINGTON: The US government on Monday temporarily eased some trade restrictions imposed last week on China’s Huawei, a move that sought to minimize disruption for the telecom company’s customers around the world.
The US Commerce Department will allow Huawei Technologies Co. Ltd. to purchase American-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.
The company is still prohibited from buying American parts and components to manufacture new products without license approvals that likely will be denied.
The US government said it imposed the restrictions because of Huawei’s involvement in activities contrary to national security or foreign policy interests.
The new authorization is intended to give telecommunications operators that rely on Huawei equipment time to make other arrangements, US Secretary of Commerce Wilbur Ross said in a statement.
“In short, this license will allow operations to continue for existing Huawei mobile phone users and rural broadband networks,” Ross added.
The license, which is in effect until Aug. 19, suggests changes to Huawei’s supply chain may have immediate, far-reaching and unintended consequences for its customers.
“The goal seems to be to prevent Internet, computer and cell phone systems from crashing,” said Washington lawyer Kevin Wolf, a former Commerce Department official. “This is not a capitulation. This is housekeeping.”
Huawei, the world’s largest telecommunications equipment maker, declined to comment.
The Commerce Department said it will evaluate whether to extend the exemptions beyond 90 days.
On Thursday, the US Commerce Department added Huawei and 68 entities to an export blacklist that makes it nearly impossible for the Chinese company to purchase goods made in the United States.
The government tied Huawei’s addition to the “entity list” to a pending case accusing the company of engaging in bank fraud to obtain embargoed US goods and services in Iran and move money out of the country via the international banking system. Huawei has pleaded not guilty.
Reuters reported Friday that the department was considering a temporary easing, citing a government spokeswoman.
The temporary license also allows disclosures of security vulnerabilities and for Huawei to engage in the development of standards for future 5G networks.
Reuters reported Sunday that Alphabet Inc’s Google suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licensing, citing a source familiar with the matter.
Google did not immediately respond to a request for comment on the new authorization.
Out of $70 billion Huawei spent buying components in 2018, some $11 billion went to US firms including Qualcomm Inc. , Intel Corp. and Micron Technology Inc.
“I think this is a reality check,” said Washington trade lawyer Douglas Jacobson. “It shows how pervasive Huawei goods and technology are around the globe and if the US imposes restrictions, that has impacts.”
Jacobson said the effort to keep existing networks operating appeared aimed at telecom providers in Europe and other countries where Huawei equipment is pervasive.
The move also could assist mobile service providers in thinly populated areas of the United States, such as Wyoming and eastern Oregon, that purchased network equipment from Huawei in recent years.
John Neuffer, the president of the Semiconductor Industry Association, which represents US chipmakers and designers, said in a statement that the association wants the government would ease the restrictions further.
“We hope to work with the administration to broaden the scope of the license,” he said, so that it advances US security goals but does not undermine the industry’s ability to compete globally and remain technology leaders.
A report on Monday on the potential impact of stringent export controls on technologies found that US firms could lose up to $56.3 billion in export sales over five years.
The report, from the Information Technology & Innovation Foundation, said the missed opportunities threatened as many as 74,000 jobs.
Wolf, the former Commerce official, said the Huawei reprieve was similar to action taken by the department in July to prevent systems from crashing after the US banned China’s ZTE Corp, a smaller Huawei rival, from buying American-made components in April.
The US trade ban on ZTE wreaked havoc at wireless carriers in Europe and South Asia, sources told Reuters at the time.
The ban on ZTE was lifted July 13 after the company struck an agreement with the Commerce Department that included a $1 billion fine plus $400 million in escrow and replacement of its board of directors and senior management. ZTE, which had ceased major operations as a result of the ban, then resumed business.
(Reporting by Karen Freifeld in New York and David Shepardson in Washington; Additional reporting by Diane Bartz in Washington and Angela Moon; Editing by Lisa Shumaker and Cynthia Osterman)