thousand and nineteen and Wednesdays
usually a high-energy day in terms of
some of the critical issues for 2019 in
the global economy
clearly energy is one of those no doubt
about that I was trying to think about
this in simplistic terms and I came up
with three to one it was three years ago
in Davos that we saw prices break on the
downside below $30 a barrel which is
pretty extraordinary it led to the new
idea of a declaration of cooperation
between OPEC and non-opec players which
it was implemented two years ago
December and the one year is the kind of
testimony to the stability is provided
in the markets although there's still a
great deal of volatility which also
makes it extremely difficult at
different stages of the cycle to garner
investment and there's some very
interesting numbers going to bring up
during the panel about what we've seen
in terms of investment in the United
States but also at the same time the
down cycle we've seen in global oil and
gas investment
there's also another trend that we see
the investment community exiting the IOC
s and son instances because of climate
change and whether they're prepared for
the great energy transition which I want
to talk about in the last say 15 minutes
of our discussion here today we see a
lot of investment money going into the
renewable sector what is it telling us
what can the IOC s do to be ahead of
that curve do they broaden their
portfolio to include renewables as well
we also talked about the electrification
of the energy sector today and natural
gas as not just a transition fuel but
something that'll be withstanding for
decades to come if in fact we see that
pick up in electrification we have a
fantastic panel I'll scoot out of the
way here first it's the OPEC OPEC
Secretary General Muhammad Burke kendo
good to see you back in Davos john hess
of hesse petroleum Vicky Hall up is
great to see you from Occidental
Petroleum and Dan uragan who luckily I
get a chance to chair with in different
corners of the world on energy the
author and the vice chairman of IHS
market let's give them a nice welcome to
the new energy equation just a kind of
housekeeping point here this is on the
record and it's being streamed as we
talk will be using highlights in our
coverage here for CNN and also happen on
CNN business comm our our digital
coverage so this is not Chatham House
Rules but the real deal
I wanted to bring up a graphic to start
our debate first and foremost
and I'm in my opening remarks I was
talking about the volatility this is the
US oil surge which i think is
interesting and we can start here if we
want if you go back to 2000 we had US
output according to the International
Energy Agency if six million barrels a
day we had this trough all the way to
2010 11 12 and then that surge that
picked up to take us to by some
estimates eleven point seven million
barrels a day to round out 2018 so a key
question and I think we'll start here
which on hesse and then I'll bring Vicki
into the debate because you're both in
the two biggest fields when it comes to
u.s. shale in the Permian and at the
Bakken Vicki do you want to start us off
here can this level of expansion in the
United States be sustained everybody has
this question it's attracted a lot of
investment but can we see the pace of
expansion of US production continue and
what does it mean I think certainly the
resources are there in both the Permian
Basin and John's going to talk about the
Bakken but in the Permian Basin
there's still intervals to be developed
there's that is a multi paid Basin it's
the most stacked pay basin and all the
United States and its world class basin
and so I believe the resources are there
so it's going to depend pretty much on
what all prices are but over the last
few years as you know we've driven down
the the break-even price of much of the
resource in the Permian Basin some of it
to less than 40 maybe in a few cases
less than $30 a barrel so they're still
gonna be plenty of opportunity to grow
the Permian depending on the price how
about the expansion of production can we
see 15 million barrels a day in the near
foreseeable future John yes I absolutely
think so but I think
but people don't realize as shale is
about 6% of world oil supply now and it
probably will go up to 10% by mid decade
but then it flattens out resources do
start to degrade the Vicky's right that
the resource base right now is very
healthy but eventually you get to
locations that aren't as attractive as
the ones were drilling right now so
shale is not the next Saudi Arabia but
at the end of the day it's an important
short-cycle component of the supply mix
in the world and we're still learning
what that means when I had my opening
remarks I was talking about the OPEC
plus agreement that we came out of Davos
three years ago when we saw that price
collapse there was no mechanism to try
to balance the market or almost serve as
a informal regulator if you will before
I bring in his Excellency Mohamed barque
endo I wanted to get your thoughts in
particular do you think Saudi Arabia and
Russia and the other members of OPEC for
actually coming up with this concept
because Donald Trump seems to take a
good whack at OPEC eight times during
2018 and he seemed to time it right at
the at the beginning of the meeting or
at the end of the meeting what are your
thoughts about that effort in itself the
secretary-general of OPEC as well as
OPEC members play a very important role
in stabilizing markets for oil so those
efforts are to be recognized we're in a
long-term business with 10-year 20-year
investment horizons and if you have WTI