Corporate Debt Review

My Take at Windsor

Cloistered with Global Energy Leaders

Tomorrow (Tuesday) Marina and I are flying off to London and the non later in the week to the annual Windsor Energy Consultation. ECRG Directors will be attending the Consultation as well.

Windsor is my third major international meeting in the last month. I have already provided in ECRG Intelligence details on the previous sessions in Paris and Frankfurt (the Iranian Summit). Windsor, on the other hand, is of a far different order.

Each year, the Windsor Energy Consultation is the high point of my international travel. This year marks the seventh in which I will be providing two of the featured presentations, one to the plenary meeting and the other to a special session for ambassadors and ministers (“The Ambassadorial Briefing”).

This is a gathering quite unlike any other.

For one thing, it takes place while the royal family is in residence outside London at Windsor Castle, Berkshire. That means we get to stay at the castle for three days. Windsor Castle is the oldest (and largest)continuously used royal residence in Europe, initially built by William the Conqueror in the late 11th century.

For another, it remains the only energy conclave authorized by a royal decree from Queen Elizabeth II. Each year, it brings together major figures from the energy sector, ambassadors, ministers, and top analysts from around the world.

There are only some 50 delegates to the three days of plenary sessions, buttressed by several dozen ambassadors and officials for The Ambassadorial Briefing on Saturday afternoon. The main sessions are held in the historic Vicar’s Hall astride St. George’s Chapel.

By tradition, we have a late night tour of the Chapel, one of the most famous medieval high-arched edifices in England. The Knights of the Garter meet here. Ten monarchs are buried at St. George’s. The tomb of Henry VIII and Jane Seymour is in the floor. You walk right over them.


The Vicar’s Hall has existed in one form or other for seven hundred years. Shakespeare had one of his early performances of “The Merry Wives of Windsor” there. About 1693 it was converted into a library, the format it retains today.

The choice of the hall for the Consultation is intentional.It makes for an intimate venue and, with the application of the Chatham House Rule, some frank conversation. Established in 1927 during a particularly contentious negotiation in London, the Rule reads as follows: “When a meeting,or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed.”


But it is The Ambassadorial Briefing that comprises the hallmark of each Consultation. It brings together plenipotentiaries of the major energy producers worldwide. Combined with the reception beforehand andthe formal dinner afterwards, it provides a rare opportunity for discussion.There is something else unique about the Briefing. It takes place in the castle’s dungeon!

That location is also intentional. Under the watchful gaze of Curfew Tower, you descend a winding staircase from Horseshoe Cloisters to be greeted by imposing steel doors. Once you are inside and those doors close, no transmission of any kind can enter or leave.

That makes it a very secure location for sensitive discussions. One just hopes the staff remembers you are down there.


Shifting Balances, Shifts in Financing

The theme of this year’s Consultation involves discussions around the developing balance emerging between global oil/natural gas production and demand, as well as the prospects for financing it.

For oil, the balance remains dependent upon OPEC and major non-cartel producers continuing the cut/cap regimen agreed to at the end of November in Vienna and first applied last month.

On the natural gas front, that balance is developing between liquefied natural gas (LNG) terminal capacity and global demand. Balance is likely to be achieved by 2023, although changes in hub prices will change the dynamics of that movement.

LNG shipments will be rising far quicker than volume moved conventionally through pipelines. Capex for LNG infrastructure is now factored in. Meanwhile, new pipeline networks beyond the local feeder types are still possible, but time delays and the rising cost in building them will mean little international movement beyond those between contiguous countries.

Conversely, the local hubs resulting from LNG shipments will transform pricing methods and emphasize spot sales. All of this will be taking place over the next several years in an environment anticipating expanding across-the-board demand in end usage from heat and power, for transport,petrochemical feeder stock, and industrial applications.

The wildcard in all of this remains Iranian volume. That was the reason for the recent Summit I attended in Frankfurt.

Among the representatives present at Windsor are those from OPEC, Russia, the UK, and Norway. We will have a rare opportunity to assess how the Vienna Accord limiting production when combined with the estimates of North Sea production will impact oil volume.

What is lacking from the other Windsor participants is a detailed treatment of how U.S. unconventional production impacts on this picture.

That turns out to be my job.

This year, I am providing 2017 estimates and analysis for the U.S. oil and natural gas market and how they figure into the broader global energy picture.

What I have been witnessing in my travels for the past year will be reinforced by those attending the Windsor Consultation. Not only isthere new interest in how American production influences global expectations,there is also a massive change in international financing trends.

Both are part of my two Windsor presentations.

I intend to provide a link to all the slides from my plenary session presentation here next week. Tradition obliges that they be presented first at Windsor. But given that they are mine, and will be provided personally here along with my later analysis, they are not in violation of the Chatham House Rule.

In anticipation, the two slides below provide a summary of the takeaways I shall provide at Windsor and embellish upon in upcoming issues of ECRG Intelligence.




Much more on all of this and further implications beginning here next week.

About the Author


Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk management, emerging market economic development, and market risk assessment.

He serves as an advisor to the highest levels of 27 countries, including the U.S., Russian, Kazakh, Chinese, Iraqi, and Kurdish governments, to the governors of several U.S. states, and to the premiers of two Canadian provinces. He’s served as a consultant to private companies, financial institutions and law firms in 29 countries, and has appeared more than 2,300 times as a featured radio-and-television commentator. He appears regularly on ABC, BBC, Bloomberg TV, CBS, CNBC, CNN, NBC, Russian RTV, and the Fox Business Network.

A prolific writer and lecturer, his six books, more than 2,700 professional and market publications, and over 650 private/public sector presentations and workshops have appeared in 47 countries.