Scale continues to be the theme as we get into the Texan way. Great speech from Matt Fox EVP at Conoco Phillips, where he discussed the scale thatnow exists in unconventional gas and the seismic changes there.
Tuesday May 1st, 10:00 GMT
Bob Ruddiman, Head of Energy and Natural Resources, Pinsent Masons
He tossed in some great gags along the way (ask me the one about the giraffe next time you see me – its all in the delivery). There was less hilarity, though, when one thought about Matt’s message. Candidly ,the whole US industry got it wrong 10 years ago in forecasting a gas crisis, and the rush to build LNG terminals for import was not so clever with hindsight. We now have a US gas glut and the prices have gone through the floor. Once technology catches up the processes will become slicker and the balance between onshore/offshore might change. The industry went offshore because onshore resources seemed exhausted…..does that mean we rein back offshore? What happens when we get good enough to take unconventional – and some might say controversial -onshore technology into the offshore environment? Its certainly a fascinating time to be in this industry.
Elsewhere, the US financial press is running a story about the “pay packet” of Aubrey McLendon, CEO, Chairman and co-founder of Chesapeake Energy Corporation. With Chesapeake, McLendon arguably “fathered” shale gas and the unconventional. Market forces mean his dollars are now under scrutiny, and the element he receives from each well looks to be entering history. Debates on remuneration are all about perspectives, as any financial services business will tell you. For a gas magnate’s pay packet to attract press attention will tell you that times are a-changing in the industry.
The main course is about to be served, the conference is under way, and the big questions remain: Who has the biggest stand? Who has the quirkiest marketing gimmicks? How many warnings will there be about theft of intellectual property? The technology plays are important here – they are where the value can be impacted most. However, the talk of table is that the industry still needs people, and there is an acceptance that they need to be regulated. Legal change is on the agenda, but it needs to take the right form.
It all comes back to perspectives. One lady from a small provincial town is talking about music, proudly exhorting that her bar has both types of music: “country……and western”.