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By Ernest Scheyder, Anna Driver and Ron Bousso
HOUSTON, Feb 24 (Reuters) - The world's top oil executivesgathered in Houston this week seem to agree on one thing: thisyear is set to be so horrible that many skip right to 2017 andbeyond to talk about hopes for market rebalancing that so farhas eluded the battered industry.
In April 2015, the energy sector's biggest annual conferencewas abuzz with speculation when oil prices might bottom and theidea that prices could hover below $60 for years after tumblingfrom over $100 seven months earlier was considered a soberingone.
This time, with prices near $30 and last year's "lower forlonger" catch phrase replaced by "even lower for even longer,"oil executives attending the IHS CERAWeek conference are moresolemn and guarded in their predictions.
"This year we are in a survival mode," Juan CarlosEcheverry, chief executive of Colombia's national oil companyEcopetrol told the conference on Tuesday.
John Hess, chief executive of Hess Corp, one of theindependent U.S. shale producers, said the industry appeared tobe only halfway through its downturn.
"It's probably a three-year process and we're in the middleof that rebalancing now," he said.
Stephen Chazen, CEO of Occidental Petroleum, agreed,but warned that hopes to see the market rebound can make peopletoo optimistic.
"Usually you get a false bottom, or two or three or four,"Oxy's CEO said.
The industry experienced one such false dawn last year whenoil prices rallied in the second quarter only to give up gainsin the second half of the year before tumbling further to freshlows at the beginning of this year.
Now, executives are pinning their hopes on forecasts thatglobal oil demand will continue to rise and eventually eliminateglobal oversupply, in part created by the U.S. shale drillingboom of the past decade.
However, with the International Energy Agency now predictingsuch rebalancing to start next year and continue in 2018, thechilling message is that many oil companies, primarily among theU.S. shale producers, may not live to see that recovery.
Mark Papa, former chief executive officer of EOG Resources who pioneered drilling in shale for crude oil, said thiswas the worst downturn he has seen since 1986 and one that would"leave bodies and companies all over the place." (Graphic: http://tmsnrt.rs/1mT1RpC)
"I think you will see a much more stable and morebalance-sheet focused industry emerge from the ashes, but it'sgoing to be really, really ugly to get through this valley,"said Papa, who is now a partner at private equity firmRiverstone Holdings.
On Tuesday, Silver Run Acquisition Corp an investment vehicle sponsored by Riverstone, raised $450 millionin an initial public offering to fund acquisitions of energycompanies seen as available at discounted prices.
More than 40 U.S. energy companies have declared bankruptcysince the start of 2015, with more expected to come.
Saudi Oil Minister Ali Al-Naimi, industry veteran of sevendecades, who came to Houston with assurances that it was not theKingdom's intention to drive U.S. shale rivals to extinction,struck a philosophical note.
"I've seen oil at under $2 a barrel and at $147, and muchvolatility in between. I've witnessed gluts and scarcity. I'veseen multiple booms and busts," he told the annual gathering ofsome 2,800 energy executives and professionals.
"These experiences have taught me that this business, andthis commodity, like all commodities, is inevitably cyclical.Demand rises and falls. Supply rises and falls. Prices rise andfall."
That could not ring more true at a conference where just twoyears ago Chevron CEO John Watson declared that $100 a barreloil was there to stay. "$100 a barrel is becoming the new $20,"he said back then.
But whereas executives of big players such a Britain's BP or Canada's Suncor Energy voiced confidence thatthey'll make it through this slump like many others, that senseof historical perspective is a luxury many U.S. shale drillerscan ill afford.
"There seems to be a preocupation with 'When is it going toturn? How long is it going to last?,'" said Mark Berg, executivevice president for corporate operations at Pioneer NaturalResources, a large Permian Basin operator. "That isunderstandable because there are a lot of companies facingstress and trying to plan for a very uncertain future."
(Reporting by Ernest Scheyder, Anna Driver, and Ron Bousso atIHS CERAWeek in Houston; Writing by Tomasz Janowski; Editing byTerry Wade, Bernard Orr)
