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 This week in Davos, however, some of the most powerful oil CEOs
gathered on the sidelines of the World Economic Forum and were
presented with an embarrassment of riches.
While the appearance of Iran's new president and oil minister in
front of the heads of BP <BP.L>, ENI <ENI.MI>, Total <TOTF.PA> and
Lukoil <LKOH.MM> made most headlines, the executives also heard
presentations by officials from Canada, Mozambique and Mexico.
The head of BP <BP.L> Bob Dudley drew a simple conclusion: "It just
shows how big the shifts are in the industry."
Oil prices peaked at $147 a barrel in 2008 amid growing fears that
the world was running out of oil. Five years on, oil is considered
plentiful thanks to the U.S. shale oil revolution and the discovery
of massive oil and gas fields elsewhere.
Some executives are beginning to talk about an easing of resource
nationalism, one of the hottest topics in the industry over the past
decade as countries such as Russia and Kazakhstan became
increasingly assertive about developing their reserves themselves.
"Today a number of countries which have huge reserves of oil and gas
begin to say that they need investments to develop them," said the
head of Lukoil Vagit Alekperov.
"It is not only Iran. It is Mexico, East Africa. We have seen a
period of national protectionism when unfortunately we could not
access some countries because it was all run by national companies.
Today the situation changes," he said.
CAPITAL DIET
Privately-held Lukoil, which is limited in accessing giant fields in
its home base Russia, this week signed a memorandum to study
projects in Mexico with state energy company Pemex as the country
opens up its energy sector to boost production.
Mexican President Enrique Pena Nieto last month signed a bill into
law that ended the country's 75-year-old oil and gas monopoly.
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Iranian President Hasan Rouhani called on oil companies in Davos to
return to Iran as part of Tehran's move for a rapprochement with the
West. Meanwhile, Canada and Mozambique are tapping some of the
world's biggest oil and gas fields.
For oil majors, that means one thing: Their bargaining power is
as great as ever as a huge number of large projects compete for
their money.
"I made it clear some time ago I'm not going back to Iran under old
contract terms even if all sanctions are lifted," said the chief
executive of ENI Paolo Scaroni.
The stiff competition between projects comes as oil majors slash
their budgets in response to shareholders' calls on them to stop
overspending and increase dividend payouts.
"We are all on a capital diet right now, and that means that some of
these projects won't be developed unless terms are attractive," the
CEO of one oil major said. That presents an opportunity for players
who in the old days would always lose out to majors.
"Majors will no longer be developing the lion's share of big
projects in the world. But it doesn't necessarily mean they will
remain undeveloped. I expect national oil companies like China's
CNPC and even mid-sized independents to step in and fill the space,"
another oil executive said.
(Editing by Hugh Lawson)
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