OPEC warns IEA's U.S. oil forecast may hurt investment
LONDON -- The head of OPEC warned Tuesday that its members' spending plans could be undermined by an energy watchdog's forecast that the U.S. will leapfrog Saudi Arabia in terms of oil production.
On Monday, the International Energy Agency, which represents key oil consumers, predicted the U.S. will overtake Saudi Arabia as the world's largest oil producer by 2020 thanks to a shale output boom.
But speaking at an energy conference in London, Abdalla Salem el-Badri, secretary general of the Organization of Petroleum Exporting Countries, said, "If this message keeps coming, there will be no investment" from the group's members and "consumers will lose."
"I don't believe that shale gas will have a big share," he said.
But Maria van der Hoeven, the IEA's executive director, who was sitting on the same panel, told Mr. el-Badri that "you can't close your eyes to reality."
Mr. el-Badri also confirmed previously unveiled OPEC investment plans. The group said earlier that its members plan to invest about $270 billion in oil projects between 2012 and 2016, adding 5 million barrels a day in liquids-production capacity.
The disagreement was accompanied by smiles and a friendly tone and concluded with a hug. But it came just minutes after the two sides had congratulated each other for mending fences after years of squabbling over oil policies.
"There was once a war between [OPEC and the IEA]. But we don't fight" publicly, Mrs. van der Hoeven said earlier, though she added they may still quarrel privately.
"We have no problems...with the IEA," Mr. el-Badri had said. "We are managing to have the same understanding."
Following the arrival of Mrs. van der Hoeven at the helm of the IEA last year, the two sides appear to have agreed more on immediate issues than long-term forecasts.
This year, the agency decided against an oil stockpiles release--a move that infuriated producers last year.
Instead, Mrs. van der Hoeven thanked OPEC for supplying the required barrels to make up for any disruptions.
"The market is well supplied," she said. "The call on OPEC...has never been unanswered."