Aveneu Park, Starling, Australia

A few observations from the road

From CERA in Houston to IP Week in London, here are a few tidbits I’ve picked up:


–Mama, do let your son — or daughter — grow up to be in the energy business. If there’s one theme that has been heard in both locales, it is that the energy industry is going to need a lot of people in coming years, and job prospects will be strong. It’s a common lament, it’s nothing new, but it’s particularly notable in an era of layoffs that have even touched a few oil companies. Even at IP Week parties in London, several people commented that the rooms full of traders seemed to mostly feature people in their 50’s or beyond. There is a need for a next generation.
–OPEC reportedly had a meeting last week of various member representatives to talk about a variety of things, including existing production levels. Representatives of Venezuela continued to insist at this gathering that the country’s production is at 3 million b/d. This, of course, is ludicrous; every single observer of Venezuelan exports and other supply indicators puts the country’s production below 2.3 million b/d. What sort of credibility does this country have when ministers meet behind closed doors to hammer out new quotas or new targets? Are the Venezuelans holding to the 3 million baloney there also?
–Aubrey McLendon of Cheapeake Energy hasn’t dimmed his natural gas enthusiasm one bit, despite the collapse in his company’s stock price, his own personal finances and the price of natural gas. He gave a speech at CERA, and then a follow-up press conference, where he continues to tout US-based shale gas reserves as gigantic and a likely game-changer affecting energy markets. It’s easy to dismiss this as so much posturing, but the entire energy world has been waiting for the next transformative technology to come along. If the technological progress made in extracting natural gas from shale formations is extended to Europe — still reeling from the Russian cutoff to Ukraine, and by extension, the continent — and possibly to Asia, shale gas could be that transformative technology. Transformative technology is not necessarily something other than hydrocarbon-based.
–It’s hard to look around at a packed party during IP Week and think we’re in a recession. But the fact is a few regular soirees were cancelled, and there were reports that the normally lax “invitation only” standards at some events actually were being enforced. Maybe it’s because nobody we’ve spoken to thinks these prices might actually hold. They’re not sure when they will turn higher, but the certainty is that they will.

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