Global Energy Briefing: An Industry Poised for Change
This session focused on the urgency for change forced by a series of crisis – first the 2008-9 financial crisis then the 2014 commodity price drop related to the “era of abundance”. In the long term the industry could be facing a discovery crisis, with the lowest amount of new oil added last year since 2002. A closer look at the record reveals that we are still relying more on increasing production from existing fields than new discoveries. In fact the global discovered reserves were less than 12 billion barrels in 2015. The current investment environment is causing quandaries in many countries as they face direct fiscal pressure and try to balance the need to secure short-term revenue and the demand for investment. As a result companies have been looking hard at their DNA and asking tough questions about what assets, what geography, what size, what structure and what skills they will need to be competitive in the future.
NOCs have been asking about sustainability of their model of providing dividends to the government and employment and maintaining production. Governments are being forced to look at opening and or modifying their terms to secure the income they need. When one looks at a map of what is available for business these days it covers most of the globe. In the end it boils down to who provides the most competitive model, with the best risk and reward balance.