MARIA:  WELCOME BACK.
MARIA:  WELCOME BACK.
OIL PRICES UNDER FRESH YOUR,
OIL PRICES UNDER FRESH YOUR,
FALLING TO SOME OF THE LOWEST
FALLING TO SOME OF THE LOWEST
LEVEL IN 20 YEARS, DESPITE
LEVEL IN 20 YEARS, DESPITE
EFFORTS TO CUT SUPPLY AS GLOBAL
EFFORTS TO CUT SUPPLY AS GLOBAL
DEMAND DWINDLES DUE TO
DEMAND DWINDLES DUE TO
CORONAVIRUS.
CORONAVIRUS.
OPEC IS SAYING DEMAND WILL FALL
OPEC IS SAYING DEMAND WILL FALL
BY 20% THIS MONTH AND 6.9% FOR
BY 20% THIS MONTH AND 6.9% FOR
THE FULL YEAR.
THE FULL YEAR.
JOINING US RIGHT NOW IS FORMER
JOINING US RIGHT NOW IS FORMER
SHELL OIL PRESIDENT, JOHN
SHELL OIL PRESIDENT, JOHN
HOFMEISTER.
HOFMEISTER.
GREAT TO HAVE YOU THIS MORNING.
GREAT TO HAVE YOU THIS MORNING.
THANK YOU FOR GIVING US YOUR
THANK YOU FOR GIVING US YOUR
INSIGHTS.
INSIGHTS.
HAVE YOU EVER SEEN ANYTHING LIKE
HAVE YOU EVER SEEN ANYTHING LIKE
THIS PERIOD BEFORE WHERE YOU’VE
THIS PERIOD BEFORE WHERE YOU’VE
SEEN SUCH A SHUTDOWN IN DEMAND
SEEN SUCH A SHUTDOWN IN DEMAND
AT A TIME WHEN YOU HAVE GLOBAL
AT A TIME WHEN YOU HAVE GLOBAL
PLAYERS REFUSING TO CUT
PLAYERS REFUSING TO CUT
PRODUCTION, ALTHOUGH WE’RE GOING
PRODUCTION, ALTHOUGH WE’RE GOING
TO TALK ABOUT THE CUT AGREEMENT
TO TALK ABOUT THE CUT AGREEMENT
THAT JUST TOOK PLACE THIS WEEK.
THAT JUST TOOK PLACE THIS WEEK.
>> THIS DEMAND IS TRULY
>> THIS DEMAND IS TRULY
UNPRECEDENTED IN HOW IT’S JUST
UNPRECEDENTED IN HOW IT’S JUST
COLLAPSED.
COLLAPSED.
IT EVIDENCEONE KAYE YOU DAY YOU
IT EVIDENCEONE KAYE YOU DAY YOU
AIRPLANES IN THE AIR, COMMUTER
AIRPLANES IN THE AIR, COMMUTER
TRAFFIC HAS DISAPPEARED.
TRAFFIC HAS DISAPPEARED.
THERE’S A HUGE DEMAND
THERE’S A HUGE DEMAND
DESTRUCTION TAKING PLACE.
DESTRUCTION TAKING PLACE.
THE PROBLEM WITH CUTTING
THE PROBLEM WITH CUTTING
PRODUCTION TO MATCH THE DEMAND
PRODUCTION TO MATCH THE DEMAND
DESTRUCTION IS YOU DON’T JUST
DESTRUCTION IS YOU DON’T JUST
TURN OFF A WELL LIKE A LIGHT
TURN OFF A WELL LIKE A LIGHT
SWITCH.
SWITCH.
YOU REALLY HAVE TO ENGINEER IT
YOU REALLY HAVE TO ENGINEER IT
DOWN AND SO THAT YOU CAN
DOWN AND SO THAT YOU CAN
ENGINEER IT BACK UP WHEN
ENGINEER IT BACK UP WHEN
PRODUCTION RETURNS OR WHEN
PRODUCTION RETURNS OR WHEN
DEMAND RETURNS.
DEMAND RETURNS.
SO IT’S A LONG PROCESS UNLESS
SO IT’S A LONG PROCESS UNLESS
YOU WANT TO DO DAMAGE TO YOUR
YOU WANT TO DO DAMAGE TO YOUR
RESERVOIR AND FEW COMPANIES WANT
RESERVOIR AND FEW COMPANIES WANT
TO DO THAT.
TO DO THAT.
MARIA:  YEAH, I UNDERSTAND.
MARIA:  YEAH, I UNDERSTAND.
BUT I MEAN, YOU KNOW, YESTERDAY
BUT I MEAN, YOU KNOW, YESTERDAY
OR THIS WEEK, RATHER, I HAD AN
OR THIS WEEK, RATHER, I HAD AN
INTERVIEW WITH THE OIL MINISTER
INTERVIEW WITH THE OIL MINISTER
OF SAUDI ARABIA AND HE SAID ON
OF SAUDI ARABIA AND HE SAID ON
THIS PROGRAM THEY’RE GOING OF TO
THIS PROGRAM THEY’RE GOING OF TO
CUT BY 20 MILLION BARRELS A DAY.
CUT BY 20 MILLION BARRELS A DAY.
IS THE MARKET NOT BUYING IT?
IS THE MARKET NOT BUYING IT?
THEY DON’T THINK THAT THESE
THEY DON’T THINK THAT THESE
PRODUCERS WILL KEEP TO THEIR
PRODUCERS WILL KEEP TO THEIR
PROMISES OR IS IT JUST THAT THE
PROMISES OR IS IT JUST THAT THE
MARKET IS LOOKING AT THE DEMAND
MARKET IS LOOKING AT THE DEMAND
SHUTDOWN AS THE DOMINANT STORY?
SHUTDOWN AS THE DOMINANT STORY?
>> I THINK THE DEMAND SHUTDOWN
>> I THINK THE DEMAND SHUTDOWN
IS THE DOMINANT STORY.
IS THE DOMINANT STORY.
I THINK THAT WE WILL ACHIEVE
I THINK THAT WE WILL ACHIEVE
ROUGHLY A 20 MILLION-BARREL A
ROUGHLY A 20 MILLION-BARREL A
DAY PRODUCTION TAKE-DOWN BUT
DAY PRODUCTION TAKE-DOWN BUT
IT’S GOING TO TAKE SOME TIME TO
IT’S GOING TO TAKE SOME TIME TO
GET THERE AND I THINK THAT SOME
GET THERE AND I THINK THAT SOME
OPEC MEMBERS WILL CHEAT.
OPEC MEMBERS WILL CHEAT.
THEY ALWAYS DO.
THEY ALWAYS DO.
YOU CAN’T BELIEVE THE
YOU CAN’T BELIEVE THE
CREDIBILITY OF OPEC.
CREDIBILITY OF OPEC.
IT HAS NEVER BEEN THERE AND IT’S
IT HAS NEVER BEEN THERE AND IT’S
NOT GOING TO COME BACK ANY TIME
NOT GOING TO COME BACK ANY TIME
SOON.
SOON.
SO THERE WILL BE OVER-PRODUCTION
SO THERE WILL BE OVER-PRODUCTION
BECAUSE PEOPLE STILL WANT TO GET
BECAUSE PEOPLE STILL WANT TO GET
WHATEVER REVENUE THEY CAN.
WHATEVER REVENUE THEY CAN.
WHAT’S INTERESTING, IN THE U.S.
WHAT’S INTERESTING, IN THE U.S.
RIGHT NOW THE POSTED PRICE OF
RIGHT NOW THE POSTED PRICE OF
$18 AND CHANGE, THERE’S A LOT OF
$18 AND CHANGE, THERE’S A LOT OF
OIL BEING SOLD RIGHT NOW, MARIA,
OIL BEING SOLD RIGHT NOW, MARIA,
FOR SINGLE DIGIT NUMBERS.
FOR SINGLE DIGIT NUMBERS.
JUST TO GET IT OFF THE BOOKS OF
JUST TO GET IT OFF THE BOOKS OF
THE COMPANY THAT’S PRODUCING IT
THE COMPANY THAT’S PRODUCING IT
SO THAT TO GET WHATEVER REVENUE
SO THAT TO GET WHATEVER REVENUE
THEY CAN GET AND NOW WE’RE
THEY CAN GET AND NOW WE’RE
GETTING INTO A STORAGE PROBLEM.
GETTING INTO A STORAGE PROBLEM.
WHERE DO YOU PUT ALL THIS EXCESS
WHERE DO YOU PUT ALL THIS EXCESS
OIL?
OIL?
IT’S NOT LIKE THERE’S AN
IT’S NOT LIKE THERE’S AN
INFINITE AMOUNT OF STORAGE.
INFINITE AMOUNT OF STORAGE.
WE’RE RUNNING OUT, PROBABLY BY
WE’RE RUNNING OUT, PROBABLY BY
MID-MAY THERE’S NOT GOING TO BE
MID-MAY THERE’S NOT GOING TO BE
ANY STORAGE LEFT.
ANY STORAGE LEFT.
MARIA:  WHICH IS WHY THE
MARIA:  WHICH IS WHY THE
DEPARTMENT OF ENERGY APPARENTLY
DEPARTMENT OF ENERGY APPARENTLY
IS PROPOSING THAT THEY WILL PAY
IS PROPOSING THAT THEY WILL PAY
OIL PRODUCERS TO SIT ON AS MUCH
OIL PRODUCERS TO SIT ON AS MUCH
AS 365 MILLION BARRELS OF OIL
AS 365 MILLION BARRELS OF OIL
RESERVES.
RESERVES.
THE PLAN WOULD REQUIRE
THE PLAN WOULD REQUIRE
ADDITIONAL APPROPRIATIONS FOR
ADDITIONAL APPROPRIATIONS FOR
CONGRESS TO BE PUT INTO PLACE
CONGRESS TO BE PUT INTO PLACE
BUT THIS IS ONE OF THE REASONS
BUT THIS IS ONE OF THE REASONS
BECAUSE THEY RECOGNIZE THAT
BECAUSE THEY RECOGNIZE THAT
THERE’S NOWHERE ELSE TO STORE IT
THERE’S NOWHERE ELSE TO STORE IT
RIGHT NOW.
RIGHT NOW.
DO YOU THINK IT’S POSSIBLE TO
DO YOU THINK IT’S POSSIBLE TO
ENACT SUCH A PLAN?
ENACT SUCH A PLAN?
>> I THINK IT’S A VERY PRAGMATIC
>> I THINK IT’S A VERY PRAGMATIC
SUGGESTION AND IT REALLY MAKES A
SUGGESTION AND IT REALLY MAKES A
LOT OF COMMON SENSE.
LOT OF COMMON SENSE.
BUT NOW YOU’RE TRYING TO PUT
BUT NOW YOU’RE TRYING TO PUT
COMMON SENSE INTO A POLITICAL
COMMON SENSE INTO A POLITICAL
ARENA WHERE THAT DOESN’T REALLY
ARENA WHERE THAT DOESN’T REALLY
COUNT.
COUNT.
PARTICULARLY THE DISLIKE OF MANY
PARTICULARLY THE DISLIKE OF MANY
DEMOCRATS TOWARDS THE OIL
DEMOCRATS TOWARDS THE OIL
INDUSTRY.
INDUSTRY.
WHEN THEY CHOSE NOT TO BUY OIL
WHEN THEY CHOSE NOT TO BUY OIL
TO STOKE UP THE STRATEGIC
TO STOKE UP THE STRATEGIC
PETROLEUM RESERVE IT WAS JUST A
PETROLEUM RESERVE IT WAS JUST A
SYMBOL OF THEIR VISCER AL
SYMBOL OF THEIR VISCER AL
DISLIKE OF THE INDUSTRY.
DISLIKE OF THE INDUSTRY.
CHINA AND INDIA ARE FILLING UP
CHINA AND INDIA ARE FILLING UP
STRATEGIC RESERVES AT VERY LOW
STRATEGIC RESERVES AT VERY LOW
PRICES.
PRICES.
BUT THE AMERICANS, NO, WE’RE NOT
BUT THE AMERICANS, NO, WE’RE NOT
DOING THAT BECAUSE OF THE
DOING THAT BECAUSE OF THE
POLITICAL GAMES BEING PLAYED IN
POLITICAL GAMES BEING PLAYED IN
WASHINGTON.
WASHINGTON.
MARIA:  UNBELIEVABLE, JOHN.
MARIA:  UNBELIEVABLE, JOHN.
YOU SAID IT, SPOT-ON.
YOU SAID IT, SPOT-ON.
SO MUCH POLITICS AT SUCH AN
SO MUCH POLITICS AT SUCH AN
INCREDIBLE MOMENT, SERIOUS
INCREDIBLE MOMENT, SERIOUS
MOMENT IN TIME FOR THE AMERICAN
MOMENT IN TIME FOR THE AMERICAN
PEOPLE.
PEOPLE.
WE’LL KEEP TALKING ABOUT.
WE’LL KEEP TALKING ABOUT.
JOHN, GOOD TO SEE YOU THIS
