Petroleum Economist returned to Kuwait on 26 January 2016 for the second instalment of our Energy Strategy Forum, Global hydrocarbons- an industry disrupted?, co-hosted with Kuwait Petroleum Corporation (KPC). 300 senior energy officials, national and international oil companies, policy makers and financiers gathered at the Sheraton in Kuwait City to discuss the challenges facing the global energy sector.
The 2016 event took place against the backdrop of significant volatility in the global oil market, with prices having fallen to 13 year lows at the beginning of the year. For supplier nations, such volatility poses significant challenges to financial planning, while oil and energy companies are being forced to re-evaluate their business models and strategies for development.
The role of OPEC and the necessity for oil-producing nations to work together to reduce volatility were key themes throughout the day’s discussions. Speakers also focused on how the market will manage the return of Iranian oil to the market, as well as the continuing disruptive impact of shale, gas and renewables.
Nizar Al Adsani, chief executive of Kuwait Petroleum Corporation opened proceedings, stating that low oil prices and the current market conditions provide opportunities for structural reform in the industry which will benefit regional economies in the longer term. Mr Al Adsani also emphasised the importance of continuity of investment in exploration activities globally in order to ensure stable market supply and to prevent further volatility.
Petroleum Economist was honoured by the participation of HE Anas Al Saleh, minister of finance and deputy minister of oil of Kuwait. Mr Al Saleh stressed Kuwait’s determination to focus on its long term strategy and to continue to invest heavily in the oil and gas sector and maximise production efficiency. Mr Al Saleh also stated that he believes that OPEC’s current strategy is working as planned, so far.
HE Adil Abdul Al Mahdi, minister of oil of Iraq also gave a keynote address at the conference. Mr Al Mahdi emphasised how damaging low oil prices are for the world economy and highlighted how he expects decreased investment in production globally to eventually bring about a sharp rise in demand and prices. Mr Al Mahdi also stated that Iraq is ready to consider reducing its production if other OPEC member countries can agree a deal.
Setting the scene for the day’s discussions, panellists on the opening session explored the new dynamics of global oil supply and demand, sharing their predictions for oil prices in the coming year and debating the impact of the return of Iranian oil to global market.
Bakheet Al Rashidi, president and chief executive of Kuwait Petroleum International, took to the stage for a keynote interview, opening the downstream section of the agenda. Mr Al Rashidi shared his views on the future potential of the petrochemicals industry and spoke about KPI’s future plans.
Assad Ahmad Al Saad, former chief executive of PIC and Mohammad Husain, president and chief executive of EQUATE participated on the second panel discussion of the day: Diversifying revenues through petrochemicals, discussing the outlook for the Kuwaiti petrochemical sector locally and internationally and debating how Kuwait and the region can best maintain the lead in the global petrochemicals market.
Concluding the day’s discussions, panellists on the closing panel, Finance and Governance, stressed that the prevailing attitude across the industry is ‘business as usual’, despite the challenges and obstacles in the current environment. Speakers pointed out that interesting projects and good investment opportunities remain but that a change in strategic approach is required for financiers and investors to benefit from the opportunities in the present climate.
Petroleum Economist would like thank all of our sponsors, speakers and attendees for contributing to the success of this year’s Forum. We look forward to welcoming you back again next year.
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