The world's largest oil companies are looking past the chaos, destruction and lost production caused by the war in the Middle East as they target greater access to the region's vast oil and gas reserves, a prize they have pursued for decades. Executives from Shell, BP, Total Energies, Conoco Phillips and Chevron this week expressed their appetite for investing in the world's most prolific oil-producing region, arguing that its plentiful, low-cost reserves outweighed the heightened risks.
The confidence is set to continue this weekend when many of the same executives travel to Riyadh at the invitation of Saudi energy minister Prince Abdulaziz bin Salman for the World Petroleum Congress, despite security concerns as Iran-backed Houthi rebels pursue a military campaign against the kingdom. Some executives are also cultivating relationships in the hope of grabbing new opportunities thrown up by the war, as Arab governments reassess global relationships and weigh the huge job of rebuilding facilities after the conflict ends.
Patrick Pouyanné, chief executive of France's Total Energies, the oil major with the largest Gulf footprint, said he dreamt "more than ever" of putting money into every country in the region. "For us as investors, I strongly believe the Middle East still has the cheapest oil," he said. Wael Sawan, head of Shell, said he fundamentally believed high-quality assets stewarded by capable governments in the Middle East meant those resources would reach the market. BP chief executive Meg O'Neill said the company, which began as the Anglo-Persian Oil Company, had a "history rooted in the Middle East."
The biggest prize would be greater access to Saudi Arabia and the United Arab Emirates, which possess some of the world's largest and cheapest-to-produce hydrocarbon reserves. Both have traditionally kept tight control of their most valuable fields through their national oil companies, limiting foreign participation. Aramco head of strategy Ashraf Al Ghazzawi said the Middle East has 50 per cent of the globe's oil reserves, adding, "We have to look beyond the current crisis. Energy is a long-term business."
Source: Financial Times Companies · Summarized by HeadlinesBriefing