By Dmitry Zhdannikov and Shadia Nasralla
VIENNA, June 3 (Reuters) - Six months after OPEC upended oilmarkets and sent prices crashing, the head of U.S. oil giantExxonMobil has an unusual message for the cartel:thanks.
While Exxon and other large oil companies have been forcedto slash spending, cut staff and sacrifice tens of billions ofdollars in revenue as oil prices halved, they have also watchedwith quiet satisfaction as upstart rivals from the U.S. shalepatch struggle simply to survive through the downturn.
The price collapse has helped shine a sharper light on thehighest-cost producers, Rex Tillerson, head of the world'slargest publicly traded oil company, told a rare meeting of oilexecutives and OPEC ministers.
"We're trying to discover where the marginal barrels arearound the world. It's important for all of us to know," hesaid. "We are constantly chasing the price against the cost ofsupply."
"We live with a lot of uncertainty and we're rewarded forhow well we manage it," said Tillerson, one of the best-paidCEOs in the world. If you can't live with uncertainty, "be alibrarian", he said.
OPEC decided against cutting its oil production last year tofight for market share with non-OPEC producers, thus aggravatinga global oil glut that arose due to a shale boom in the UnitedStates. The group is expected to maintain that policy on Fridayat its first meeting since the November decision.
Oil prices crashed to as low as $46 per barrel by early 2015from as much as $115 in mid-2014.
Prices have recovered to around $65 per barrel in recentweeks on fears that oil companies have reduced investments tooquickly and too steeply, which might result in project delaysand reduced output.
Tillerson has repeatedly said the downturn was a time ofopportunities to acquire rivals, although Exxon has yet toemulate a megadeal done by rival Royal Dutch Shell inApril to acquire smaller competitor BG for $70 billion.
Tillerson also urged against excessive cuts amid a low oilprice environment - be it capital spending or staff: "We arechasing a moving target (oil price). We always overshoot in bothdirections - on the way up and on the way down".
OPEC ministers and delegates said they saw prices risingfurther to $70-80 per barrel, but not all CEOs agree.
The head of oil major BP, Bob Dudley, said he sawsoftness in prices in the second half of 2015 as global supplyoutpaces demand.
Weak prices might be what companies such as Exxon and BPneed if they want to expand.
"If we stay lower for longer, we might see more activity inM&A (mergers and acquisitions)," Dudley said.
But besides the consolidatory impact, low oil prices couldalso encourage some substantial changes such as previouslyunheard-of partnerships between operators.
"We have always shared risk and reward through equitypartnerships but we need to be more creative to keep pushingback frontiers in a $60 world," Dudley said.
The head of French oil company Total, PatrickPouyanne, said he was confident technology would achieve furtherbreakthroughs to allow the U.S. shale oil industry to increaseoutput even in an environment of low oil prices.
Asked whether he had a target price in mind for U.S. shaleor Total's operations in general, Pouyanne said: "We have amargin - not a target price. I'm not crazy to bet on one targetprice". (Editing by Dale Hudson)
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