The Organization of the Petroleum Exporting Countries (OPEC) will continue dialogue with U.S. shale oil producers, the cartel's Secretary General Mohammad Sanusi Barkindo said Monday at CERAWeek 2018 by IHS Markit.
The secretary-general said he will hold meetings with shale companies later Monday, without giving any specific names, but added the dialogue would be "a continuation of an icebreaker meeting we had last year in CERAWeek."
During CERAWeek 2017 last March, Barkindo said OPEC began dialogue with American shale producers, although the parties were regarded as being on the opposing side in the global oil market during the period of plummeting prices from 2014 to 2016 when both sides felt the pain of a low price environment.
"No other OPEC country was insulated from [low prices]. More than 100 companies filed for bankruptcy in the U.S.," Barkindo said.
"We are happy to break the ice last year. It is in our interest to continue dialogue, to learn experience from them, to survive this cycle ... We are selling to the same market, and every producer is needed to meet future demand," he added.
The secretary-general said the parties' dialogue this year will include topics such as high level of productivity, efficiency, and cost reductions.
Barkindo proposed that OPEC should also invite financial actors and stakeholders to the global oil industry for open dialogue as well.
"There is no doubt financial markets continue to have an impact on oil, physical oil. We, in OPEC, are trying to understand the complexity and sophistication of this market and their impact on us. We cannot afford to continue to stay apart, although they are not part of the oil market. It is a symbiotic relationship with them," he explained.
In reference to the possibility of continuing the production cut agreement between OPEC and non-OPEC, Barkindo did not confirm if the sides would extend the deal beyond the end of this year, but said the outcome would depend on the meetings between the parties in June and November.
"Right now, we are in the process of implementing it," he said.
"Everyone is benefiting from the 24 countries' participation in restoring balance into the [oil] market," he said, and added that he invites other producers to join the Declaration of Cooperation, which he also referred to as the 'Vienna Alliance.'
Barkindo stated that earlier this year he had met with Patricia Espinosa, the executive secretary of the United Nations Framework Convention on Climate Change about carbon emissions.
Speaking on carbon emissions, the International Energy Agency (IEA) Executive Director Fatih Birol said during the same panel that after 30 years the fossil fuels' share in the global energy mix is still above 80 percent.
"Fossil fuels are stubborn, but we cannot keep using fossil fuels without implementing the critical technology of carbon capture and storage (CCS)," Birol said.
"When it comes to climate change, the problem is not energy, it is emissions. CCS is coming back strongly," he added.
Birol concluded by saying that the IEA is in talks about CCS technologies with the U.S., Canada, the U.K., many OPEC countries, as well as several oil companies.
By Ovunc Kutlu in Houston