OPEC wants to develop a closer relationship with the U.S. shale industry.
OPEC General Secretary Mohammed Barkindo Tuesday said he invited U.S. shale officials to join him at an OPEC summit in Vienna in June.
Barkindo says he made the invitation while at CERAWeek annual energy conference in Houston. He met with shale executives at a dinner Monday. Last year's conference was the first time that OPEC met with executives from the U.S. shale industry. Another dinner is slated for next year.
Until last year, meetings between U.S. oil producers and OPEC were unprecedented.
"We compared notes on our experiences in this cycle which everyone agreed was the most injurious," the OPEC official said.
The new supply from the U.S. weighed on prices, causing a collapse to $30 per barrel two years ago. Since then OPEC, led by Saudi Arabia, along with Russia and other non OPEC producers agreed to curb production so the world could soak up some of the global oversupply.
Prices have recovered to above $60 and Barkindo described the agreement, which will be reviewed in June to be "as solid as the Rock of Gibraltar," Barkindo said at CERAWeek. OPEC would also like to make the agreement more permanent.
Aleksey Texler, Russia's first deputy minister of energy, said at CERAWeek that he believes Russia and OPEC will continue their alliance even after the production agreement ends, but he sees no reason for Russia to join OPEC.
"I don't' think there's a strong need to cement something or cast it in stone," he said, adding that the alliance helps with coordination on technology and other issues.
The accord to keep 1.8 million barrels of production off the market runs through the end of the year, and it is expected to be reviewed in June. Texler said the target of OPEC and Russia's alliance has not been met yet, but that rebalancing of the market could come in the second half of the year, "maybe third quarter."
Barkindo said the U.S. industry's rebound from the crisis has been impressive, specifically, the more efficient drilling practices that have been developed.
"The entire industry could learn something from them. They are able to raise production and raise efficiency. It's something we in the industry need to learn," he said.
U.S. shale producers have pioneered new techniques to drill oil more efficiently but also in places that were once seen as impossible.
The U.S. is now producing a record 10 million barrels a day, putting it slightly ahead of Saudi Arabia.
Barkindo said shale producers also are able to tap capital markets with more expertise, which is important at a time when the energy industry needs to invest trillions to meet future demand.
"A major concern is our industry's inability to attract capital. This is extremely risky," he said.
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