Energy importers must set aside dreams of energy independence to work out their differences in the face of rising oil prices.
Attempts by consumer countries to break free of their dependence on foreign oil only increases friction on international markets, as do nationalizations and arbitrary contract changes by producing nations, said Rex Tillerson, chairman and chief executive of Exxon Mobil Corp.
While Tillerson did not cite any specific examples among producing countries, Venezuela recently nationalized its oil production, which left foreign producers like Exxon and Italy's Eni SpA out in the cold.
"Some exporting and importing countries are losing sight of their interdependence," he said at an energy conference in Rome. "They are responding to the energy challenge by pursuing policies of resource nationalism."
In the United States, the gap between domestic consumption and production stands at 30 percent of the country's daily demand for energy, Tillerson said in his address to the forum.
While greater energy efficiency and access to domestic supplies could reduce the gap, nothing can "eliminate Americans' need for imports" and the pursuit of energy independence only adds uncertainty among international trading partners, he said.
Tillerson's comments were echoed by other speakers at the industry forum running through Thursday.
"Unless we change our motoring habits, energy independence in the United States is not attainable," said Michael Morris, CEO of American Electric Power Co.
Governments in energy-rich countries must also be dependable, refraining from further nationalizations and from making unilateral changes to their existing contracts, Tillerson said.
"International oil companies need to be confident that contract terms will be honored or they'll be less likely to do technological upgrades and investments" of oil and gas projects, he said.
Exxon Mobil, the world's largest publicly traded oil company, walked away from its heavy oil upgrading operations in Venezuela's Orinoco Basin earlier this year after President Hugo Chavez's government changed the terms of the contracts.
The company filed a US$750 million arbitration claim with the International Centre for Settlement of Investment Disputes in September over its stake in the Cerro Negro crude upgrading facility.
Countries like Venezuela, Russia and Bolivia have asserted greater state control over their oil or natural gas assets in recent years, in some cases to divert money to issues including education and poverty. Under Chavez, Venezuela has raised royalty and tax rates on foreign oil companies, then later took majority control of all oil projects as part of a larger nationalization drive.
Addressing another flashpoint in energy relations, European Commission President Jose Manuel Barroso said at a news conference that Europe's trade with Russia, a major energy exporter, can be "a win-win situation" for both sides.
Tensions rose in recent years when Europe saw energy supplies disrupted by disputes between Russia and countries through which energy supplies pass on their way to Germany, Poland and elsewhere.
With oil prices surging near US$100 per barrel, problems persist as the European Union increasingly worries about Russia's use of energy as a political weapon and Moscow frets about an EU plan to curb the country's energy ambitions in the 27-nation bloc.
Under the plan, which still needs approval from national governments and lawmakers, utilities that generate electricity or extract natural gas will have to sell their transmission networks or lease them to independent operators.
This would apply to foreign companies that want to invest in the EU, such as Russia's natural gas monopoly OAO Gazprom, the bloc's single-largest energy supplier.
Viktor Khristenko, Russia's Minister of Industry and Energy warned at the conference that such rules would limit future investment in key European infrastructure such as pipelines and cross-border electricity cables.
Subscribe to Pravda.Ru Telegram channel, Facebook, Twitter, YouTube, RSS!
Russia should introduce martial law throughout the country, Chechen President Ramzan Kadyrov said commenting on the morning drone attack on Moscow