- 16 hours ago
Category
🗞
NewsTranscript
00:00Minister, let's start with you. Thank you so much for, you know, to you and your beautiful country for hosting us.
00:05Now, with the visit of President Trump last week, there was a lot going on, of course, in Qatar.
00:10We saw huge, huge commitments from the countries he visited, including this one.
00:15Were you under pressure to make a deal in the energy sector for President Trump?
00:20First, it's great to be here at Bloomberg's with all of you, with Ryan and yourself again.
00:32Regarding the visit of President Trump, of course, it was a historic visit.
00:38We were very thrilled to have him here as the first sitting president to visit Qatar.
00:42Pressuring us on doing deals.
00:46I think, you know, as you know, President Trump is a businessman, first and foremost, and he understands business very well.
00:56We had several deals that were done in Qatar during his visit.
01:01So there was the energy sector.
01:03If we take a look at the energy sector, we had a project in Qatar.
01:09For, you know, for the last 70 years, we've had American companies here.
01:12So we've had several projects, Northfield East, Northfield South, where Ryan is a partner.
01:19These are all commercial projects that have American presence.
01:24We have two projects in the U.S., the largest single investment in LNG export facility in the U.S.,
01:31the largest eating cracker in the world in the U.S., about 30 billion project.
01:35So these are all commercially viable projects that we're doing.
01:38From my vantage point as the chairman of Qatar Airways, we had a tender for buying airplanes that we need for the expansion of Qatar Airways.
01:50And Boeing gave us the best deal.
01:52It was better than Airbus.
01:54And we went ahead with that because it was the most commercially viable.
01:57If you look at our investments in QIA, we have already made a lot of investments in the U.S.
02:04And we're making more.
02:05And these are all commercial deals that we're doing.
02:09Our military are buying equipment that they need for their military.
02:13So regarding pressuring us to do deals, I would say no.
02:16I think we're happy to do deals with American companies because they provide a win-win solution for us.
02:23And all the deals that we do, like in the energy sector, are 25, 30-year deals.
02:28So they have to survive different administrations, CEOs, and so on.
02:32So I would say pressuring, no.
02:35But we're happy to do deals where they are mutually beneficial.
02:38Minister, you mentioned you're chairman of Qatar Airways.
02:43You had some pretty incredible profits.
02:45So how do you see that going?
02:46How did you achieve them?
02:47And actually, how do you see the introduction of Riyadh Airlines in the region affecting your business?
02:53Of course, we attribute the excellent profit to several factors.
02:59We have excellent staff, excellent leadership.
03:02So all the crew members, the pilots, the ground staff, everybody working in the company has contributed.
03:13Of course, first and foremost are the loyal clients to Qatar Airways that made this also possible.
03:20And also, you know, this is a cyclical business.
03:24Everybody's doing well in the airline business.
03:26And we just need to keep going with the same rhythm to ensure that we continuously can have good profits.
03:33Regarding Riyadh Airlines, I think, you know, we're very happy for our brothers and colleagues in Saudi Arabia
03:40that they are embarking on this expansion in the airline business.
03:46It's a huge country, Saudi Arabia, whether it's size of the country or size of the population.
03:52And I think it's overdue to have additional airlines and airline products in Saudi Arabia.
04:00And if there's anything that we can do to support Saudi Arabia from Qatar Airways, we'd be happy to do that.
04:07But we wish them all the success.
04:08And I think it's very much needed for Saudi Arabia and the region.
04:12Ryan Lance, President Trump pledged to drill baby drill.
04:16Is it happening?
04:17And if it isn't, why not?
04:18Well, I think the president's got a unique ability to boil things down to a bit of a bumper sticker.
04:24I think the drill baby drill, people get fixated on how many rigs are running in the U.S.
04:29and is that representing a drill baby drill.
04:31I think it's a broader strategy that the president is trying to articulate around taking the natural resources
04:36that are endowed to the U.S. and really continue that growth and development.
04:40So it's got multiple dimensions.
04:42It's permitting reform to speed things up.
04:44It's more infrastructure being built, high-voltage transmission lines.
04:47It's gas pipelines.
04:49It's eliminating the LNG pause that the prior administration put in.
04:52So I think it's a statement that articulates a broader strategy that wants to use the endowed resources
04:59that we have in the United States to continue that growth and that development
05:02and continue to be able to import and export energy that the full world needs today.
05:09Breakevens for U.S. shale, I think, on average, pre-trade wars and tariffs, were about $65 a barrel.
05:16What's the new breakeven level now that, you know, the cost of pipes have gone up,
05:20but also drilling have gone up because of tariffs?
05:23Yeah, I don't think the breakeven probably hasn't moved a lot.
05:27I think long-term, if you're going to see oil prices in a comfortable range,
05:31maybe in the 70s or 65 to 75, we'll still see continued modest growth out of the U.S.
05:37Now, what happens at, you know, sub-60 is we start to plateau in the U.S.
05:41and even in the 50s probably start to decline the production a little bit.
05:46So there is kind of an equilibrium place even in the U.S.
05:50that allows the shale to continue its maturity and its growth,
05:53but we see plateauing production, you know, probably at the end of this decade coming out of the U.S.,
05:59unless there's going to be another technological breakthrough in our business.
06:03And don't bet against our industry because we're, as Excellency knows,
06:08we're pretty good at trying to figure out how to get more out of the subsurface endowment that we have in our country.
06:14Minister, most of Qatar's LNG sales are also linked, of course, to oil prices.
06:19How has the oil's slump this year affected Qatar?
06:23You know, the oil slump, I would like to add to just what Ryan mentioned, you know,
06:30in general, all oil companies look at their revenue and look at their capital expenditure over the next few years.
06:37And the way you can spend more capital, there are two things.
06:42There's capital to sustain.
06:44People don't talk about sustaining your actual production,
06:47which gets more expensive with time to maintain it and drill additional wells and so on.
06:51So you need a lot of revenue for that.
06:53In addition to that, the additional capex to expand and to keep additional reserves coming.
07:00And you need, in general, you'd need somewhere in the range of $70 to $80, in my view,
07:09to be able to sustain the current production and increase.
07:14And when you look at the U.S., for example,
07:16I mean, one of the things that came out of the visit is a more, a better understanding of, you know,
07:21with my counterpart, you know, Chris Wright, Secretary Chris Wright from the U.S.
07:26and the colleagues that came with President Trump,
07:29they have an ambition of growing their power to, for an additional 100 gigawatts of power.
07:35And that's for AI, that's for additional industry that they want to bring back into the U.S.
07:40All that needs power.
07:42And if you don't have additional investment, you know, to sustain that power, you know,
07:47from gas and other sources, they've opened up coal and others, you know,
07:52it's going to damage that ambition, if you will.
07:55So I think if oil prices decline below 60, there definitely is going to be a decline in investment
08:02and all the requirements for power are not going to be fulfilled worldwide, not only in the U.S.
08:08And, Mr., are you committed to the oil price link, no matter what?
08:12Yeah, I mean, the oil price link, I mean, some of our products are, you know, we produce oil,
08:16we produce condensate that's associated with gas, and some of our gas is linked to crude.
08:21But, of course, if crude comes down, it affects the entire, whether it's petrochemicals, whether it's oil,
08:26whether it's gas, fertilizer, it affects the whole thing.
08:29Ryan, I mean, to the Minister's point, do you think Donald Trump's push for more energy production in the U.S.,
08:35but also faster permitting of LNG products will affect the market?
08:39Well, we certainly hope so.
08:41If you think about the market in the LNG side, it's probably growing 1 to 2 percent compound annual growth.
08:46So it's a market that's growing from about 400 or so million tons today to something probably north of 700 million tons
08:53over the course of the next decade and beyond.
08:55So it's going to take a lot of growth.
08:58It's going to take growth in Qatar.
08:59It's going to take growth in the United States, the two biggest suppliers in the world,
09:04to satisfy the enormous amount of energy growth that's coming.
09:07It's going to be power, as His Excellency has talked about, around the whole world,
09:11not only in the United States, but around the world as well.
09:14So that's coming.
09:17And fortunately, we're endowed with a very large gas resource, as is Qatar, with a large north field.
09:24And we're proud to be a partner here and proud to be putting our investment in the U.S.
09:29for more liquefaction capacity and exporting that product to around the world as well.
09:34Minister, where does potentially higher U.S. exports leave major LNG producers like Qatar?
09:39Again?
09:40If the U.S. exports more LNG, where does it leave Qatar?
09:43No, I think, you know, we are the biggest supply that's going to come from the U.S. next year.
09:48We're going to start our LNG export by the end of this year and really start the full production sometime in the next year.
09:57But the first LNG that will come from our Golden Pass LNG, which is the largest single export project in one go that's built in the U.S.,
10:05is going to have 18 million tons of production.
10:08We own 70 percent of that.
10:10So we will be exporters from the U.S.
10:13I think the U.S. volumes are going to go to certain markets that are mostly Europe, South America,
10:21and our volume will predominantly be serving Asia that is difficult for the U.S., I think, to reach,
10:30or the entire volume to go to Asia.
10:34But in general, I think we need all that volume.
10:37It's us, it's the U.S., I think some Australian volume, and others.
10:41You know, you're going to have 1.5 to 2 billion people on this earth in the next 20 to 30 years,
10:49and you have 1 billion people around the world that don't have basic electricity.
10:52So the need for electricity and power is huge.
10:55So we're not worried at all about, you know, having a supply glut or anything like that.
10:59And I think I would add that people immediately go to the competition between the U.S. and Qatar.
11:04It's really not.
11:05It's a cooperation because of the different market access that both countries have to the growing demand.
11:11And so it's a cooperation.
11:13It's really not a competition.
11:14But how do you see this?
11:15I mean, when you look, Ryan, at, you know, the impact of Shale's new model of financial discipline or investor return,
11:21how is this different this time to previous downturns in 2015 and 2020?
11:26Well, I think the balance sheets of the companies in the business is so much better.
11:29We've gone through consolidation and mergers and acquisitions,
11:33and the net result of that is the balance sheets of all our companies are in much better shape to withstand some of these downturns.
11:39Our company in particular, you know, we've got a pretty deep inventory of low-cost supply resources,
11:45and that's what we're trying to drive so you can be profitable through the ups and the downs in this business.
11:50They're invariably going to be there.
11:52If you don't have a plan to deal with volatility, you'll be dead in this business.
11:55So, you know, you've got to have that, and it starts with a very strong balance sheet
11:59and being able to invest through the cycles with a very long-term global view of supply-demand,
12:05which we have, and it's very constructive.
12:08And, Minister, I know you've also been in talk with buyers such as China and India
12:12for a fresh round of LNG supply deals.
12:15Is there a sticky point? When can we have more news on that?
12:18No, I think we're, you know, after this talk here, I'm flying to China.
12:24We have the World Gas Conference in China that I'm speaking in tomorrow morning,
12:28and I'm meeting all the buyers in China.
12:31We have a great relationship with China. We are the largest supplier to China,
12:35and they are the biggest buyer by far, by more than double, you know, anybody else that's buying from Qatar.
12:43So we have a very good relationship.
12:45They are discussing with us additional volume.
12:48India is discussing with us additional volume,
12:51but we have multiple countries that are discussing with us additional volume.
12:55And these negotiations take time, and some go a little bit further.
12:59I think what you're alluding to is some articles that came out regarding sticking points and so on.
13:06You always have sticking points with all negotiations,
13:09whether it's with India, China, or anybody else.
13:12Everybody wants a better deal from both sides.
13:14Everybody always wants a better deal, right?
13:16Let's face it.
13:17Ryan, when do you think U.S. shale production will peak?
13:21Tell me the price.
13:22So if the price is in the 50s, we probably have a sustained price.
13:28So I'm talking about not just what's happening today,
13:31but if it sustains itself for a long period of time,
13:34U.S. shale is probably, it's peaked and will start declining in the 50s.
13:38It probably plateaus for quite a while in the 60s.
13:42And actually, if you get back to sort of that comfortable range that is excellently talked about,
13:47there's continued growth in the U.S. shale.
13:49So we believe it could go, in the 70s, it could go over 14 million barrels a day
13:54from its current level of low 13.3, 13.4.
13:58So it really depends on what that sustained price is going to look like.
14:02If we have a longer-term price like we're seeing today, it's going to flatten out.
14:07Minister, Kater was also amongst the first GCC states to invest in gas exploration and production around the world.
14:15So what new investments do you see on the horizon from Kater?
14:19Yeah, we are one of the largest, if not the largest, company around the world in owning exploration blocks.
14:25Exploration has a 10% success rate, so if you drill 10 wells, one is successful.
14:29So we have been successful in some regions, but this is a continuous drive to explore more,
14:36and we're really participating in new exploration blocks around the world.
14:41We have had some successes, and I'm very optimistic about the future, but it takes time.
14:45How much LNG is Kater Energy trading currently?
14:48Is this something that...
14:49LNG? Trading.
14:50Trading. There's a lot of excitement, actually, in the market about this.
14:53Trading was something we started just a few years back.
14:57What we saw is there was money left on the table, if you will.
15:02Traders from around the world were buying Kater.
15:05We have some spot cargo sometimes, and they would buy our cargo and make money off it,
15:09and we have the capability and can actually establish a trading organization.
15:16So we did. We established a trading organization.
15:18Currently, we are trading around 10 million tons of LNG, physical trading of 10 million tons of LNG.
15:28The mandate is more than 50% needs to be non-Qatari volume, which is the case today.
15:33The ambition is by 2030 to reach somewhere in the range of 30 to 40 million tons of non-Qatari LNG traded by our trading group.
15:42But will you also reserve a portion of the output from Northfield East for spot trading?
15:47Correct.
15:47And how big...
15:48I think, you know, we're going to be producing 160 million tons of LNG as projects that we are participating in, if you include the U.S.
15:56We're at 77 million tons today.
15:59We're adding...
16:00We have 70 ships today.
16:02We're adding 128.
16:03So all that will be really under the control of our trading organization, where they can trade some of that volume.
16:14Not all of the volume will be locked up in long-term deals, but we'll have plenty to deal with.
16:20Ryan Lansett, in the minute that we have left, how do you see demand over the energy industry actually developing over the next year and two?
16:28Well, I think we're pretty constructive in the demand.
16:30And it's probably dropped off a little bit with all of the economic uncertainty in the world today.
16:35So demand grows probably 700,000, 800,000 barrels a day this year.
16:39But long-term, I think you can expect around a million barrels a day of growth.
16:44And we really don't see the end of that coming into this decade, into the next decade.
16:49So that's why we're constructive long-term.
16:51There's a little bit of spare capacity on the supply side, which has caused the price to be down a little bit with some economic uncertainty.
16:57But the long-term growth projections are pretty healthy for this business.
17:01Gentlemen, thank you so much for a good conversation on global energy supplies and security.
17:06Thank you very much.
Recommended
4:46
|
Up next
1:58
1:57
18:27
4:31
4:43
1:28
3:57
0:46
5:10
1:00
7:14
14:25
4:35
2:51
17:41
15:31
19:43
3:17
12:24
3:10
15:15
0:42
Be the first to comment