Oil producing countries need to remove barriers to investment to ensure global oil markets are well supplied, but are unlikely to do so as long as prices remain high, Exxon Mobil's CEO said on July 02. "If governments are unhappy with the current supply-demand balance, they can change it," Rex Tillerson told Reuters in an interview.
OPEC President Chakib Khelil said earlier that producers were not happy with high oil prices, which analysts and oil executives say are being driven by a tight oil market.
Tillerson said there was one way for states endowed with oil to ensure future supplies met demand. "Allow your resources to be developed to meet the world's energy needs," he urged.
He was speaking a day after the heads of some of the world's other biggest oil companies countered OPEC claims that speculators were driving high oil prices, blaming instead a dearth of new supplies.
The chief executives of Royal Dutch Shell Plc, BP Plc and Spain's Repsol YPF told the World Petroleum Congress that restrictions on where they can invest and high taxes meant they could not help boost supplies as much as they might. Thousands of delegates had gathered for the industry's biggest get-together in three years as a four-year rally pushed oil prices to new records above $143/barrel on July 01.
Exxon said every country had its reason for putting bars on investment by oil companies. In the US, the reasons were largely environmental. However, the US public mood was moving toward allowing drilling in areas currently off limits to the oil majors due to environmental concerns, Tillerson said. He said outdated environmental attitudes were the reason for opposition to drilling in areas such as the eastern Gulf of Mexico and the Arctic National Wildlife Refuge.
"We're stuck in this emotional, environmental past. Public sentiment in the United States seems to be shifting," he told Reuters. "The American people are kind of sick and tired of these prices." In OPEC countries which limit investment, he said that high oil prices meant there was little incentive to allow more access to foreign companies even though this was needed. "When the prices are high, the national governments don't see a need for an IOC (international oil company). They don't recognise the value an IOC brings," he said. Tillerson said that while Saudi Arabia was working hard to boost spare capacity, more could be done within OPEC to boost output.
He noted that the oil cartel plans to invest $210 billion in oil production and refining in the coming five years while Exxon plans to invest $125 billion over the same period.
Royal Dutch Shell is expected by analysts to invest even more than Exxon. Tillerson earlier said Kazakhstan was holding up the development of the giant Kashagan oil field through disputes with companies working on the field. "It's time for the government of Kazakhstan to stop delaying the project," he told a news conference. Tillerson said he understood Alaskans were disappointed when the US Supreme Court overturned a $2.5 billion punitive award related to the Exxon Valdez oil spill, but hoped the decision would not mar the company's relationship with the state.