U.S. oil producers sought on Wednesday to soothe OPEC`s worries about losing market share, telling the group that investors in the U.S. firms wanted a reduction in growth and higher payouts.
The Organization of the Petroleum Exporting Countries and non-OPEC allies such as Russia have cut output since 2017 to support oil prices, while watching producers in the United States, which is not party to the cuts, drive up production.
The United States has overtaken Russia and Saudi Arabia to become the world`s biggest crude producer. Output is approaching 12 million barrels per day (bpd).
OPEC`s forecasts and even U.S. government predictions have repeatedly underestimated U.S. output growth.
The bosses of U.S. firms Occidental Petroleum and Hess Corp, attending a session at the World Economic Forum in Davos, said that growth of U.S. shale oil output would slow.
The session was a rare occasion when U.S. producers and an OPEC representative, OPEC Secretary-General Mohammed Barkindo, sat on the same panel.
"I believe not as much money will be pouring into the Permian basin this time. I believe investors will hold companies accountable for returns and a lot of this didn`t happen previously," Occidental Chief Executive Vicki Hollub said.
Echoing her comments, Hess Corp founder and Chief Executive John Hess said shale production now accounted for about 6 percent of global production. "It will probably go up to 10 percent by mid-decade but then it flattens out," he said.
But he added that U.S. resources would start to degrade. "Shale is not the next Saudi Arabia. It is an important short-cycle component," he said.
U.S. President Donald Trump has repeatedly criticised OPEC for manipulating prices and demanded several times last year that the group bring them down. He has also praised OPEC, and its de facto leader Saudi Arabia, when prices have fallen.
Oil prices surged above $86 a barrel in October, but have since slipped back. On Wednesday, Brent was about $62.
Barkindo said OPEC aimed to balance supply and demand and had helped the United States by rescuing its oil industry from ultra-low oil prices.
"The oil industry is under siege globally," Barkindo said, adding that OPEC wanted to talk more regularly to U.S. producers to understand their industry better even if they could not participate in any OPEC-led production cuts.
In response, Hess said: "OPEC plays a very important role in stabilising the market and those efforts need to be recognised."
Fatih Birol, the head of the International Energy Agency, which represents industrialised nations, said most forecasts were still underestimating U.S. oil production growth.
"There is a huge potential in the U.S.," Birol told Reuters, adding that the United States could raise output by another 10 million bpd in the next decade.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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